From temporary refuge to laboratory for Gen Y business: the Epic story

The Epic innovation centre buzzes with activity as tech workers arrive in the morning.
David Walker

The Epic innovation centre buzzes with activity as tech workers arrive in the morning.

It is like entering Dr Who's Tardis. From the outside, Christchurch's Epic innovation centre looks so small – a tin box of a building thrown up as a temporary refuge for 20 small high tech firms left homeless by the earthquakes.

But pushing through its doors is an assault on the senses. Inside it suddenly feels giant, crammed with people and energy. The wide main corridor and central atrium area are all noise and confusion.

Today's big event is a Kiwi Landing Pad sales and marketing jam. About 70 listeners are huddled around speakers perched on bar stools, flown in to talk about US business etiquette among other things.

The loud American presenting does not even require a microphone. Bulletpoints on the drop down screen include "let's not be shy", "people's time = currency", and "have a mission and a message".

The seminar is happening in the open space right next to Epic's communal kitchen with its famous Google-gifted espresso machine. People passing can stop to earwig if things of interest are being said.

It is a deliberate campus atmosphere. A gossiping group of programmers in black tracksuits and board shorts come wandering along for a caffeine fix. A party of visitors here to study the ergonomics of Epic as a workplace go bustling in the other direction.

People seem sat in all corners working on laptops or prodding at phones. A new thing at Epic is the lounge where you can pay $200 a month for the right to take a seat, hook into the wi-fi, hang out as a consultant or solo contractor.

Wil McLellan, co-founder of Epic: a constant buzz of activity.
John McCrone

Wil McLellan, co-founder of Epic: a constant buzz of activity.

But how do they concentrate? Tromping footsteps echo through the thin wood ceiling from the companies on the floor above. Rowdy laughter floats down the corridor from the offices of game developer CerebralFix where there is a stand-up morning meeting going on.

For some reason this is ending in a press-up competition – as punishment or celebration, it is hard to tell.

From the street, with its cheap metal cladding construction, Epic could appear an idea that has fizzled, or a temporary fix which is now in danger of outstaying its welcome.

The proper corporate architecture of the city's Innovation Precinct is finally starting to erupt out of the ground about it. The glossy high rise headquarters of Vodafone, Kathmandu and Wynyard will soon swamp Epic. Already it is beginning to look out of place in the new CBD.

And there is mixed news on its future. Wil McLellan, an Epic founder, says the five year free lease on the council-owned plot on the corner of Tuam and Manchester St is likely to be extended. An offer is on the table that should enable Epic to remain a further seven years – so safe to 2024.

Squeezed in for the Kiwi Landing Pad seminar in Epic's atrium.
John McCrone

Squeezed in for the Kiwi Landing Pad seminar in Epic's atrium.

Yet the hoped for follow-on Sigma project – a second campus space for perhaps 100 Christchurch technology companies and 2000 employees – looks dead and buried. McLellan says land in the Innovation Precinct has proved too expensive for any expansion. Alternative locations like Sydenham or Addington do not have the same appeal.

However McLellan says he is not worried because Epic is already about much more than what you can see from standing outside. Born out of the kind of risks that could be taken after the earthquakes, it has become a civic focus of the rebuild.

It is the hub of a new community, a laboratory for a different way of thinking. And that presence is still building, McLellan says.

★★★

It does seem that after an uncertain start, Christchurch's Innovation Precinct as a whole is beginning to come together.

The Blueprint recovery plan for the central city endorsed the idea of creating two zones where high tech businesses could be clustered, putting some economic oomph into the city's rebuild.

The Health Precinct down around Christchurch Hospital and the Otago University medical school has struggled. Institutional turf wars have not helped. But also the health organisations involved have had enough other rebuild projects on their plate.

CerebralFix's Henry Lane: gamification for serious applications the next big thing.
John McCrone

CerebralFix's Henry Lane: gamification for serious applications the next big thing.

The Innovation Precinct also seemed to be going nowhere until a number of key corporate tenants suddenly committed.

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British mobile network firm Vodafone has announced it is not only going to concentrate its 350 Christchurch staff at the site but will open a business incubator, Xone, which will support start-ups wanting to develop mobile-based technology.

Wynyard Group, a maker of crime fighting software that has been a spectacularly fast growing spin-off of Christchurch's Jade Software, is another obvious win for the Innovation Precinct.

And even Kathmandu, which seems simply an outdoor clothing chain, counts as a corporate technology player. With its online sales network and logistics chains, its headquarters will be home to plenty of tech-savvy support staff.

Then the Government components are starting to fall into place. Callaghan Innovation, the Crown research agency, will have office space in the precinct, as will New Zealand Trade and Enterprise.

Inside Epic at the official opening.
Kirk Hargreaves

Inside Epic at the official opening.

Even more importantly, an ICT graduate school, co-run by the various South Island universities and polytechnics, will offer training at a post-graduate level, putting students in the middle of where new businesses are being created.

And just opened in Lichfield St is GreenHouse, an incubator space backed by the council's Canterbury Development Corporation and the Ministry of Business, Innovation and Employment.

Geoff Brash, who is running GreenHouse's first 12 week Lightning Lab, a programme to get new start-ups investment ready, says this means about half of the precinct's designated 3.6 hectares is spoken for.

With the area beginning to fill in with cafes and bars like Dux Central, the Innovation Precinct will be established with a recognisable identity by next year.

But Brash agrees Epic still feels core to the precinct, having developed from a temporary refuge for displaced businesses into something much more interesting now.

★★★

Time to take a closer look at Epic's tenants then, discover what kind of common story they might have to tell.

From the bulletin boards notices, it certainly seems Epic must be a lot of fun. Some 300 people from all over, mostly young and cool types. There are plenty of social activities on offer, from lunchtime fitness classes to evening movie nights. Mountain biking is probably mandatory. Dogs appear welcome at work.

And Epic hosts a stream of free events open to any outsider – something new like the Kiwi Landing Pad session almost every day. Technology gurus are constantly dropping by to give talks. The Ministry of Awesome has its Coffee and Jam sessions for entrepreneurs to discuss their ventures.

There are organisations like the Code Club for 5 to 8 year olds to learn software skills, the Epic Activator Adventure to help people get started with a community enterprise.

But as McLellan is keen to point out, Epic is a group of post-revenue tech businesses, not pre-revenue start-ups. So it is not just a playground for ideas and hype, but a collection of small Kiwi firms facing the common problem of how to break out of the domestic market and make it big overseas.

James Tan (left) and his Digital Confectioners' crew: a "modest" growth rate is 30 to 40 per cent.
CARYS MONTEATH

James Tan (left) and his Digital Confectioners' crew: a "modest" growth rate is 30 to 40 per cent.

First up I meet Gavin Wright, founder of health software specialist Fraame. Wright says his business is possibly the least exotic.

He points across the office partition to his neighbours, Hivemind, which fits out commercial beehives with sensors, allowing the health and honey production of hives to be monitored remotely over the net. It is hard to compete with that for funky.

Wright's own business is another case of a spin-off of products originally developed inside Jade Software, Christchurch's first big corporate-scale software success. Fraame specialises in management tools for NGO healthcare organisations like the Cancer Society and Nurse Maude.

Before the quakes, Wright was in an old building in the central city, the Civic Building in Manchester St. It was a struggle not least because he was isolated.

Wright founded the New Zealand Health Information Technology Cluster to create some networking. But even in Christchurch, the other small health software business were scattered around places like Merivale and Riccarton.

Wright says Epic solves two key problems for a small high growth technology firm like his. First, because it is a crossroads for such a mix of tenants, you can get a confident feel for the trends – what is going to be the next big thing. Someone in the building will be running around with the latest prototype virtual reality goggles or whatever.

Geoff Brash of Lightning Lab: getting start-ups investment ready at GreenHouse.
John McCrone

Geoff Brash of Lightning Lab: getting start-ups investment ready at GreenHouse.

And then there is always someone about who can help with the workaday issues of a growing business – the hundreds of small things that can trip you up, especially if you want to break into markets overseas, says Wright.

"We'd never employed people in Australia before. So when we opened an office in Melbourne earlier this year, it made it hugely easier being able to ask others about the pitfalls in the employment laws over there."

Wright says many a good high tech venture tips over because it either gets side-swiped by a shift in technology or a simple avoidable business mistake costs it dear. But almost as soon as it started up, Epic became a collective where everyone was willing to share their knowledge. Success could breed success.

Wright says Fraame has expanded from four to 12 staff since being at Epic. And like many of the other tenants, there is the feeling that its business has got to the solid point where the company could really take off over the next five years.

Across the corridor I meet Glen Duffield, co-founder of corporate training firm RedSeed. Again it is a similar story of a decent enough pre-quake business that has ramped up its ambitions since finding a home at Epic.

Duffield says RedSeed grew out of in-house sales training at Hallenstein Glassons. In the early days, it was about staff induction videos distributed on CD-ROMs. Now it is a web-based interactive service that can be marketed to corporates generally.

Technology means the service can be scaled. But Duffield says RedSeed is already running out of New Zealand customers, having signed up nearly everyone from The Warehouse to Fletcher Building. Next stop has to be expansion into the vastly larger Australian and US markets.

As a small team working solo above a bar in the old Cashel Mall, such a move would possibly have been too daunting. Now however, RedSeed is part of a branded collective.

Duffield says simply being part of Epic is a help when it comes to impressing corporate prospects. Immediately it makes a small venture look substantial. "It just gives you confidence when dealing with larger customers."

Epic's cool factor also helps attract quality staff. "Our two top developers have both come from off-shore. The UK and South Africa. Epic wasn't the whole reason, but it certainly has a bit of a pull."

Then again like Fraame, RedSeed is constantly absorbing good business advice and new industry trends almost without realising it, says Duffield. For example, at the moment, everyone at Epic is talking about gamification – building play elements and game-like rewards into regular business software.

I catch up with Henry Lane, president of business development at CerebralFix, to learn something more about that.

Lane says CerebralFix is a "work for hire" games developer that produces movie-themed games for Hollywood studios like Walt Disney and Dreamworks. It has been expanding fast and now employs 54 staff – hence the noise from the morning meeting.

As is the case with nearly all of Epic's tenants, CerebralFix is self-funded. Rather than following the Silicon Valley venture capital route, the aim is to grow organically. Maybe it is a Gen Y thing, or a Kiwi thing, but fun matters more than chasing dollars.

On the other hand, company policy is to invest in staff capability, he says. The strategy is to build up a critical mass of technical expertise so suddenly those bigger things start to happen.

Gamification – the crossover of gaming technology with serious business applications – is an example. Take the health and safety industry, Lane says.

"Typically in construction or mining, you'll get a chunky manual that's got a lot words in it you have to read through. Imagine if instead you could strap on a virtual reality headset and learn to navigate an environment safely. Perhaps you could have some giant virtual pipe and spanner. If you turn it too far, the whole thing explodes in your face."

Lane says gaming graphics have got to the point of realism where this kind of flight simulator approach could be applied to every walk of life. Software businesses just have to be ready to jump in as the market opens up.

Another form of gamification is using gaming tricks to make workplaces more exciting. "It's perfect for sales software. You could have a system that rewards employees for maintaining target times on calls by accumulating points, levels and achievements."

Lane says it might sound crass, but Trade Me and Facebook are just like giant gaming environments where people compete for rankings. Game developers understand the psychology, so can import that into the design of mainstream business software.

★★★

Continuing the tour of Epic's tenants, the story repeats. James Tan of Digital Confectioners, another video game developer, says he has the same philosophy of self-funded growth and investment in general know-how.

Tan says the international games industry sees enough gambles. Raise a few million in venture capital, hire 30 programmers – only half of whom might be any good – then roll the dice. The Epic way is instead to build steady capability.

"There's no quota that says we have to grow by x per cent this year, because that's what our investors are demanding. We're independent and so we can do it how we like to do it."

Although modest growth in Tan's context is still running a seven figure company that is growing at 30 or 40 per cent a year. "That's slow growth by our industry standards," he protests when I raise an eyebrow.

So no surprise that stepping inside Epic gives such an immediate feeling of a buzz. McLellan says with its collaborative ecosystem, where conventional business boundaries are broken down, Epic has cracked some kind of formula. And now it is really beginning to motor.

McLellan says while it is hard to put exact figures on it, all the tenants feel they are growing faster, moving into overseas markets much quicker, as a result of sharing the same premises.

Epic might have been an accident of the earthquakes. And as a temporary building, it does not look much now that the rest of the city is starting to grow back around it.

However McLellan says its collective story is still growing. The Innovation Precinct is also taking shape with all the right ingredients like the incubators and graduate schools. So another few years and Christchurch should really have something to boast about.

More Epic news:

Is the city's Blueprint dream evaporating?

Business incubator the latest for innovation precinct

EPIC pulls out over innovation precinct saga

Hivemind beekeeping technology starts new buzz

Coup for Epic co-founder

 - Stuff

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