The billion-dollar challenge
The United States of America - the country which gave us Facebook, Google and Amazon - has produced fewer than 40 $1 billion companies in the last decade.
Of the estimated 60,000 software and internet companies funded in the US since 2003, only 39 have become ''unicorns'', the term for a company worth $1 billon or more. That's around one in 1500, or 0.7 per cent, IT news website techcrunch.com says.
Unless it's a milk-producing unicorn, what, then, are little New Zealand's chances of creating such a unique beast? We don't even have 1500 venture-funded companies.
The odds are stacked against us, admits Guy Haddleton, a Kiwi who knows a bit about building high growth technology firms.
Nevertheless he believes there are two or three New Zealand companies which have the potential to become unicorns, and they're not going to get there without a mindset shift.
It is why he's been the driving force behind establishing the Unicorn Club, a grouping of around 20 locally based companies with billion-dollar aspirations.
We need people like himself who've done it before to become intrinsically involved with these CEOs to help them think differently, he says.
He has a pretty good understanding of what it takes to be a unicorn, and ''it's challenging''.
A former New Zealand Army captain with an MBA from Otago University, Haddleton started business forecasting software company Adaytum with his wife Sue in the UK in 1990. After a move to Minneapolis in the US and expansion into several countries, the company was sold to a rival for US$160 million in 2003.
In 2007 he co-founded Anaplan, currently one of the faster growing enterprise software companies in the US.
Among his other interests he was an early investor in cloud accounting software juggernaut Xero, and is on the board of crime analytics innovator Wynyard Group - which, incidentally, he believes can be a unicorn.
In today's environment potential unicorns are effectively tech companies, he says.''What we're talking about here are those companies that can do it very, very quickly. Therefore they have to have a market opportunity that is clearly defined, that's massive, and they have to have a tech platform that can scale very quickly to meet those market needs.''
New Zealand's problem is that it has a ''manufacturing culture''.
''The thing I hear and see all the time that irritates me to hell is, 'oh let's make a profit'. Well if you've got a market opportunity that is significant you need to seize that market, and then drive the profit.''
We have an example already in Xero, he points out.
The aim is to help CEOs stretch their minds and grab the opportunities. Haddleton was part of a group of 20 fast growing tech companies in Minnesota whose leaders would get together quarterly and information share.
''The environment I had that nurtured me, where you can talk privately and confidentially about some of your innermost fears or opportunities, I didn't see that here,'' he says.
The new Kiwi Unicorn Club has met twice, and is so far comprised mainly of companies based in and around the Auckland seaside suburb of Takapuna - or ''Techapuna'', as industry pundits have dubbed it, due to the growing number of technology firms calling it home.
Takapuna Beach also happens to be where Haddleton has his New Zealand pad, but the objective is definitely to expand the initiative into a national organisation, he says.Founding members of the club include inventory management software company Unleashed, baggage handling and logistics specialist BCS Group, and audio book creator Booktrack.
Unleashed CEO Gareth Berry thinks it's a fantastic initiative.
''It's really to do with the focus. If you've got a definite goal of being a $1 billion company... then that gives you a clear focus and that drives a lot of decisions that you would make.
''Creating a $100 million business isn't that difficult, he argues. ''You can build them on the smell of an oily rag and half a good idea.
''But doing it with a $1 billion business is completely different. You start looking at everything from your team, [your] strategy, your go to market... just critically assessing if you've got all the right components.
''The trust and confidentiality elements of the Unicorn Club are the key, and there has been nothing else like it in New Zealand, Berry says.
''You couldn't do it any other way. We share secrets and things we wouldn't share outside the boardroom with anyone else.''
BCS chief executive Patrick Teo has no problem with the aspirational billion-dollar target, which is roughly 6.5 times his company's current turnover of $140 million.
He points out that eight years ago BCS' turnover was just $30 million.The Unicorn Club members are all similar in that they are trying to penetrate global markets with unique product offerings, he says.
''The whole reasoning is 'why not?'. We should start thinking like $1 billion companies.''
The initiative has government cheerleaders in Economic Development Minister Steven Joyce and Trade Minister Tim Groser, while innovation agency Callaghan and Auckland economic development agency ATEED are helping out with logistics.
New Zealand does well in creating a pipeline of business startups, but it needs to be growing larger companies which can provide good jobs and create wealth for the country, ATEED's general manager economic growth Patrick McVeigh says.
''The aspiration of the people who lead those type of companies is not necessarily to take an early exit and take the money, it's to grow a sustainable legacy,'' he says.
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