Successful Kiwi entrepreneurs

by Karyn Scherer / 29 September, 2012
Successful Kiwi entrepreneurs

Some of our most accomplished entrepreneurs lift the lid on what it takes to achieve big hairy audacious goals.

What makes successful entrepreneurs different from other people? Many of them say it’s good luck. “My luck started when I was really young,” says Claudia Batten, a former lawyer who used to live in Wellington but is now a veteran of two successful start-ups in the United States that have made her a multimillionaire. She has her tongue lodged firmly below her stunningly angular cheekbones. But she is also genuinely grateful that she had the luck to have a father who taught her from a young age to “dream big, but start small”. Many other high-flyers can also attest to the huge role that family support has played in their success. Although fitness guru Phillip Mills wasn’t sure whether to be pleased or annoyed when his father once tried to be supportive. “Don’t worry, son, I’ll bail you out if it fails,” Mills recalls his dad saying. But a loving – and wealthy – family is by no means a prerequisite to building a thriving business. Anyone who has read Sir Ray Avery’s 2010 autobiography, Rebel with a Cause, will know that sometimes success can indeed be the best revenge.

According to Avery, one of his biggest advantages was that as a child, he was short-sighted, had glue ear and was dyslexic. To learn, he was forced to pay close attention to what was going on around him. He remains convinced that the key to innovation is observation. It goes without saying that entrepreneurs also need to have an enormous appetite for risk, an unwavering belief in themselves and a willingness to dedicate all their energies to achieving their goals. But the truly successful ones are also prepared to listen to good advice. As professional investors are inclined to say, many brilliant business ideas have come to naught simply because the person with the great idea was too stubborn to open his or her mind to other ways of doing things.

Someone who has observed many great ideas blossom into booming businesses is expat Kiwi Phil Veal. When Veal left New Zealand as a young engineering graduate in 1992, he did so more out of frustration with New Zealand’s sluggish economy than any desire to escape the claustrophobic clutches of Godzone. But as it happened, his OE worked out rather well. He has been a consultant in London, Singapore and New York; worked on major construction projects in Europe and Asia; and helped establish one of the world’s leading project-management consultancies. Now based in New York, he works in the lucrative field of venture capital and private equity.

Veal has invested in several fledgling businesses in this country and has also decided to take on the challenge of heading up Kea, an international network of around 50,000 Kiwi expats, launched by The Warehouse founder Sir Stephen Tindall and US-based academic David Teece. He believes 20 years abroad has given him a good understanding of how New Zealand has changed. “One of the things I find most encouraging is if I compare the New Zealand I left in ’92 to the one I visit four or five times a year now, it’s much more common to talk to young people about business and about ideas and about making a difference. When I was at school, we talked about rugby and that’s about it. “Nowadays I find it hugely encouraging. You’ve got some fantastically bright kids who are learning how to sell and not taking ‘no’ for an answer.”

Networks such as Kea are vital to boosting their chance of success, he believes. “As an investor, I tend to think through an economic lens, but we have some wonderful entrepreneurs and businesses coming out of New Zealand. For those folks, the value of the network is it can connect them with potential customers, or potential investors, or potential partners, or potential distributors in markets they wouldn’t otherwise be able to find.” As for our egalitarianism and how we define success, he also detects a slight change of attitude. “Have we got rid of the tall-poppy syndrome? I suspect not yet, but we’re getting there.” For local entrepreneurs, local networks are also vital. For the past decade, one of the must-attend events for many has been Morgo, the annual pow wow organised by venture capitalist Jenny Morel and expat Kiwi Andy Lark, these days the chief marketing officer for Australia’s largest bank, CBA.

Morgo has in many ways become New Zealand’s answer to TED, the technology conference that has grown into one of the world’s most famous forums for “ideas worth spreading”. But it is also a place where deals get done and new ventures are born. Morel, who is married to departing Reserve Bank Governor Alan Bollard, has vowed to keep Morgo going, even though she will soon be spending significantly more time in Singapore, thanks to her husband’s new job as head of the Asia-Pacific Economic Cooperation (Apec) secretariat. More than 120 people attended Morgo in Queenstown this month, including a handful of overseas guests. However, the stars of this year’s conference, which had the theme of “Success”, were the Kiwis. Almost everyone who got up on stage had founded a company now worth tens of millions, or even hundreds of millions, of dollars. Many had not felt the need to emigrate, and at least two of them, Avery and Bill Buckley, were actually part of the “brain gain”. Many came from humble beginnings, and although all of them acknowledged the importance of good luck, many were also passionate about the potential to build global companies from New Zealand. They have proved it can be done.

Bill Buckley

Bill Buckley, Buckley Systems

His technology is used to make iPads, cure cancer and make TVs.

If you met Bill Buckley at a barbecue, you’d possibly mistake him for a farmer. He is so casual and laconic, you’d never guess he is responsible for building the machines that make most of the world’s silicon chips. His magnetic technology is also used to make iPods, iPhones and iPads; cure cancer; and carbon-date some of the world’s oldest rocks. Buckley Systems’ latest product line is machines that make ultra-high-definition TV screens that will apparently leave the current crop of screens for dead. And the company does all this from Boston and Auckland. These days, it employs 400 people, but getting there hasn’t been easy. “I wouldn’t advise anyone to do what I’ve done,” he says in his usual self-deprecating way. “It’s been a tremendous uphill battle to keep it going from time to time.”

Born in the US as one of 13 siblings, he claims to have lived under bridges as a child. He came to New Zealand at a young age and recalls being required to work long hours in his parents’ factory. He often slept at school. His fascination with giant structures originally led him into shipbuilding, but thanks to a mate who was a nuclear physicist, he ended up being mesmerised by magnets. By 1978, he had founded a company that ended up conquering the silicon-chip industry. The company, of which he is the sole owner, exports 1000 tonnes of equipment a month to customers such as Foxconn, Samsung and Sharp. The US Government has also ordered 160 of its proton-therapy machines, which destroy tumours by blasting them with a beam of protons, and save patients having to endure more conventional radiation treatment. Another new invention is a biosecurity machine that will be able to scan shipping containers in just six seconds. “As soon as we get it going, everyone will want one of those bloody things, too,” he grumbles good-naturedly.

He doesn’t mind revealing that he fell out with his bank manager big time at the height of the global financial crisis. He had to put his own money into the company to keep it afloat, and was also saved by his steel supplier, which gave him a letter of credit. Shortly afterwards, the company scored the biggest order in its history – a piece of highly sophisticated equipment, known as a synchrotron, for Taiwan. His advice to other entrepreneurs is that you have to be totally dedicated to the business to succeed. “You have to live and work and dream it.” But somehow he has also found time to be involved in motorsport and be a father of seven. In the 60s he won two New Zealand sidecar championships, he once designed his own motorbike and he is still heavily involved in racing.

One of the secrets to his success, he believes, is that he hasn’t been scared to employ people or to push ahead with ambitious projects. He agrees he might be an optimist. “I always think I can do things twice as fast as I can. I tend to get myself in a bit deep.” The hardest part of being an entrepreneur is making a mistake, he says. “Fixing it is the easy part.” Buckley insists New Zealand technicians are the equal of any in the world, and fought to keep apprenticeships going here. But then it isn’t that hard to attract talent, he says, grinning, when you’re building “the neatest and biggest things you can think of”.

Phillip Mills

Phillip Mills, Les Mills International

After some major failures, a big success.

As a kid in the 60s, Phillip Mills loathed working in his parents’ gym after school because he found it boring. So when it came time to consider a career, he headed overseas, courtesy of a track and field scholarship to UCLA. At one stage, he was ranked fifth in the world in hurdles, but couldn’t represent New Zealand in the Olympics because he was by then a US resident. So he decided instead to become the manager of legendary Kiwi rock band Hello Sailor. (His sister was married to the band’s lead singer, Graham Brazier.) But when that didn’t work out, either, he finally joined the family’s gym business. In a desperate bid to make it more interesting, he hired some cheap dancers. The rest, as they say, is history.

Three decades later, fitness programmes developed by Les Mills International are used in more than 10,000 gyms throughout the world. The classes aim to make exercise much more fun, through loud music and a theatrical, motivating environment. The company records its own covers of the latest pop songs for its programmes, making it the largest employer of musicians in New Zealand. According to Mills, this also makes it the biggest producer of cover versions in the world. Like most successful entrepreneurs, Mills agrees he’s been lucky. “We got into a booming industry that 50 years ago didn’t exist." But he has also faced plenty of challenges.

His first major failure was as a band manager, when Brazier got busted for drugs and went to jail (ruining his chances of becoming the lead singer of the Doors, who Mills says had been seriously considering Brazier to replace Jim Morrison). Mills dropped out of university twice, and his first attempt to break into the Australian market was a disaster. Listing the Les Mills business on the sharemarket in 1984 also ended badly. Just a few weeks before the ’87 crash, the company was taken over by corporate raider Equiticorp. It took him five years to clean up the mess. “Fortunately, my father had already taken his money out, but I got the last laugh as he invested it in property.” But he also did some things right. After he finally paid off his debts, he went into partnership with his previous rivals in Australia. The Les Mills concept gradually took off.

The business book he has found most valuable is Good Strategy/Bad Strategy by Richard Rumelt. “It’s about identifying the real obstacles. Strategy is how you get around the obstacles.” His advice to other entrepreneurs is to be careful who you choose as distributors for your products, and review the relationship regularly. “Over time what happens is you do start to lose alignment with distributors.” It’s also vital to get the best legal advice about contracts, he says. “We made some big mistakes that came back to bite us later.” Mills admits his latest competitor, Zumba, is currently beating Les Mills at its own game. But he is determined to fight back. He has lived in lots of countries, but has now settled for good in New Zealand. “This is where I like to be. When you’re a little Kiwi firm that’s trying to take on the world, you get a lot of cool help.”

Zen and the art of body maintenance

Money is only part of the equation.

Phillip Mills is possibly the fittest and healthiest person on the planet. He looks so radiant, you fear you might get sunburnt if you stand too close to him. His passion for good health is almost religious, and like any evangelist, he is keen to share the good news.

  • Yoga: Mills is a fan, along with millions of other converts. He recommends the book The Science of Yoga and believes the research that says it keeps you younger longer. “They’re just starting to understand why yoga is so good for you,” he enthuses.
  • Friends: The best way of sticking to an exercise regimen is to do it with other people, says Mills. One of his favourite activities is mountain biking. “It’s good to do anything you love, but you’ve got to make it social. You’ve got to have it in your diary to do with your mates.”
  • Food fads: Probiotic bacteria and fermented foods such as miso are the latest must-eat substances, apparently.
  • Vitamin D: Listener readers already know this: vitamin D is vital to your immune system, says Mills. An easy way of topping up is to get at least 20 minutes of sun a day – preferably not in the middle of the day.
  • Public health: Mills despairs that governments are spending more and more on health, but mostly on ambulances at the bottom of the proverbial cliff . He would like to see a lot more spent on preventive measures. “Our health system was designed for a bygone era.”
  • Sugar: He would love to see an excise tax on sugar, as there already is on tobacco. He stopped eating dessert, and junk food between meals, three or four years ago, and swears it dramatically improved his health. “The worst thing right now is sugar,” he exclaims. “We need to eat a lot less sugar.” And that includes fruit juice.
  • And another thing: He’d like to see kids exercising more at school. And he strongly believes that cities need to be more environmentally friendly. Along with other high-profile businesspeople such as Jeremy Moon and Rob Fyfe, Mills is a supporter of Pure Advantage, a project chaired by businessman Rob Morrison that is arguing the economic and social case for green growth strategies.

Jeremy Moon

Jeremy Moon, Icebreaker

Making the most of a light-bulb moment. 

As a child, Jeremy Moon lived in a lot of different countries, so it was hardly surprising that when he went to university, he chose to study cultural anthropology. Which has led, somewhat bizarrely, to an outdoor-clothing business. Moon’s light-bulb moment was when he discovered merino clothing was vastly superior to the polypropylene garments he was used to. He sought out the South Island farmers who grew the wool, and knew he had finally found something to fulfil his “burning desire” to build an international brand. At the time he was 24 and broke, so he told his bank he wanted to build a new kitchen. Instead, he built a company that these days employs around 250 people in Wellington, the US and Europe. Moon can recall plenty of moments that at the time seemed serendipitous: “You make your mind up, and then funny things happen.” But he has also meticulously planned Icebreaker’s success from the beginning. “We really didn’t know what we were doing and we were figuring it out as we went along.”

To differentiate itself from its much larger competitors, Icebreaker has focused on issues such as sustainability, with the aim of becoming “the cleanest clothing company in the world”. It has also marketed the brand as being more edgy than its competitors. It recently opened its own stores, and to prove that it is serious, its one in New York is opposite Patagonia’s and next to Chanel’s. The plan is to eventually have thousands of stores and for Icebreaker to be a $1 billion brand. Moon doesn’t let his ambition get in the way of good sense, however. The company is holding off entering the Chinese market, for example, because so many Western retailers are losing money there. Another strategy has been to hire the best people, rather than the cheapest. Former Air New Zealand boss Rob Fyfe recently joined its board. Moon also believes companies need to constantly evolve, and is in the throes of “reinventing” the business to cope with the digital age. “There are few things as challenging as the long-term reinvention of your core belief.”

He thinks Kiwi companies need to act as locals in whatever overseas market they are targeting. He is also a big believer in outsourcing to whichever supplier can do the best job. “It’s a very old-fashioned idea that you have to do everything in New Zealand.” However, he believes the quality of people in New Zealand is “extremely high” and is determined to continue to base the company here. Moon’s passion for what he does is obvious, but he believes that customers also need to be passionate about your product for a business to succeed. “The question you have to ask yourself is: ‘Are you doing things worth talking about?’”

Claudia Batten

Claudia Batten, Victors & Spoils

The path to success is more like a doodle.

Claudia Batten likes to joke that she couldn’t think of a more unpopular profession than being a lawyer. But then she found one. The former Wellington lawyer is these days a multimillionaire, thanks to her expertise in fi guring out how to put advertising in video games. Spending her days working out how to reach “the lost boys” – young men aged 18 to 24 – wasn’t quite the career move she had in mind when she ditched her job at Russell McVeagh more than a decade ago and headed for New York. But the company she helped found, Massive Software, did so well that only three years later it was sold to Microsoft for a reported US$200-400 million. The 38-year-old is remarkably frank about her road to riches. “The reality is we were extremely lucky,” she says. “We really didn’t know what we were doing – the industry didn’t know what it was doing – and we were absolutely figuring it out as we went along.” Microsoft wasn’t quite so lucky, it seems: two years after Batten left, thecompany folded. All she will say about that, with a sly wink, is “when you lose talent – what can I say?”

After Massive, she helped found Victors & Spoils, an ad agency built on crowd-sourcing principles. Big brands were complaining about the lack of creativity from their usual sources, so she and her partners hit on the idea of getting anyone who was interested to submit a concept. The company, which she recently left, is revolutionising the industry, she maintains, by delivering better ads faster and cheaper. Batten warns wannabe entrepreneurs that the path to success is far more like a doodle than an arrow. And that there will inevitably be “vomit moments” when things go horribly wrong. It is vital, she suggests, that you get comfortable with being uncomfortable. It is also important to be relentless and to regard failure as an opportunity to learn. As for her “lucky charm”, it is “saying yes”. Her usual shtick is to tell people to emulate Lady Gaga if they want to succeed. She attributes a large part of the pop queen’s success to a particularly savvy internet and social media strategy. “Be the biggest, best, bravest version of what you can be,” she suggests.

She and Gaga share a love of shoes, although in Batten’s case, she has nowhere much to wear them in Boulder, Colorado, where she now lives. She describes it as the place most like New Zealand in the US. She is looking for another project but is not yet ready to return home. “I feel drawn to New Zealand. I absolutely think I will come back.” But for now, the US is the digital playground where she prefers to spend most of her time.

Ray Avery

Sir Ray Avery, Medicine Mondiale

A focus on the user rather than the product has paid off.

Ray Avery can’t resist telling a joke that is possibly very revealing about how he is coping with his newfound fame. On a recent taxi ride to the airport, the driver was clearly getting more and more agitated the longer Avery was jabbering away on his mobile phone. “Sir, I have to ask …,” the driver called out, but Avery was busy. When he finally ended the call, he decided to put the driver out of his misery. “Yes, I’m Sir Ray Avery,” he claims to have said. “You may have seen one of the documentaries I’ve done in Africa and Asia restoring the sight of millions of people. You may have noted that in 2010 I was the winner of the Sir Peter Blake Leadership Medal, and also the Kiwibank New Zealander of the Year. In 2011 I was voted the most trustworthy New Zealander in the Reader’s Digest poll.”

“Actually,” the driver replied, “I just wanted to know whether you wanted domestic or international.” Avery insists being so well-known is “not all beer and skittles”. But anyone who is familiar with his life story will forgive him any foibles. His tale of how he overcame an appalling childhood is truly remarkable. He believes there is truth in the maxim that Kiwis are innately practical. “We have no respect for the status quo. We think differently.” As an example, he cites his neighbour in Auckland whose dug-out basement Avery much admired. Avery had tried to dig his own basement, without much success, so asked his neighbour for some tips. “Dynamite,” the man replied.

To succeed in business, it is vital to focus on the person who will use the product, rather than the product itself, he says. That is how he ended up helping to develop a new type of incubator that will save the lives of many premature babies through its clever design. One of the key features of the incubator is a band that monitors the baby’s vital signs, and from that he has also helped develop a clever wristband, now used by St John, that remotely monitors the health of people at risk of major problems. The band is a huge improvement on the previous alarm the organisation used. He also mentions a high-end functional food for endurance athletes being marketed under the brand T-minus, which was developed from a protein formula designed for undernourished children in developing countries. His advice to any business is not to do surveys, because participants will only tell you what they think you want to know. “Observe instead.”

Avery admires the fact that Kiwis are so naturally trusting, and that we still do deals on a handshake. Although that doesn’t always stand us in good stead overseas, he is passionate about business ethics, and believes Kiwis should make more of this trait, as well as capitalising on issues such as sustainability. He also believes in karma – or what he describes as spirituality –in business. “It’s not about GDP. It’s about how we do business,” he enthuses. “Business isn’t about making money. Successful businesses are so successful because they know why they are in business. They actually have a soul and a passion for what they are doing … “I’m in a delightful business. I make stuff that makes people well and I feel really great about that at the end of the day.”

Guy Horrocks

Guy Horrocks, Carnival Labs

The internet opens up a world of opportunity for a Kiwi with app-titude.

At 28, Guy Horrocks has already experienced more success than many achieve in an entire career. In his last year of university, where he studied law and finance, he co-founded a company that analysed blood spatters from crime scenes. He and his friends managed to sell it to Environmental Science & Research, the government body that carries out forensics investigations. They used the money to start a new company, Polar Bear Farm, which invented the world’s first iPhone apps. In the year before Apple created the App Store, Polar Bear Farm was selling half of all the world’s apps for the phone. Their extraordinary success got them a meeting with Apple’s Steve Jobs and shortly afterwards with Nike. “We were only 23 at the time and in the space of four months we’d had four million downloads… It was an impressive start.”

Fast forward to 2008, and Horrocks and one of his original partners started a new company, Carnival Labs, which specialises in mobile marketing. In less than four years, they have created more than 100 mobile apps for clients such as DreamWorks, Kraft Foods, Pepsi and Time Warner. They also built the apps for CNN/Time that monitored and reported on the recent Republican and Democrat national conventions. Horrocks is particularly grateful for the “amazing support” he has received from expat Kiwis, but his own company’s ingenuity has also helped. With only $200 to spend on marketing at a midwinter trade fair in New York, for example, staff built a cardboard stand and shouted a whole bunch of homeless people, as well as potential customers, free hot chocolates. The Americans thought they were crazy, but the attention they received was invaluable.

Carnival Labs has since set its sights on a much more ambitious goal: to develop software that clients can use themselves, which should enable the company to grow much bigger. Horrocks agrees “it’s been a wild ride” but insists that hasn’t always been a good thing. In one memorable month, the company lost a major client, its Christchurch office was destroyed in the earthquakes, it missed out on a contract for Wimbledon and a taxi Horrocks was in had a major accident. The company has since relocated to Wellington, where it now employs 14 people. And though Horrocks is determined to make it big in the US, he is keen for the company “to keep its heart in New Zealand”.

He attributes his ambition to having always appreciated New Zealand’s lifestyle but being young enough to have been inspired by the success of people such as 42 Below founder Geoff Ross, Sir Peter Jackson and Flight of the Conchords. And so far he has found being a Kiwi in the US a help, rather than a hindrance. “We don’t over-promise and we tend to over-deliver,” he says, “which is the opposite of many of our competitors in America.” He is living proof that the internet is enabling Kiwis to compete on a global scale, with very little opportunity cost. “The internet and the mobile revolution mean you can start a company with so little money and export to 170 countries at the click of a button. It has truly become a borderless marketplace.”

Booking it

Some chest-beating about our tall poppies.

For people supposedly wary of tall poppies, New Zealanders are remarkably enthusiastic about ventures that celebrate success. Ray Avery’s autobiography, Rebel with a Cause, was a best-seller in 2010 and also made the Listener’s list of best books that year. Encouraged by its popularity, Avery has teamed up with television journalist Cameron Bennett and photographer Adrian Malloch to produce another book, The Power of Us, intended to celebrate “New Zealanders who dare to dream”. The book, being published by Random House, is due to go on sale in November, and will feature 50 Kiwis who have stood out in their fields, both locally and internationally. Its subjects include some unsung heroes, such as Derek Handley, the 34-year-old entrepreneur who helped found mobile marketing and media company The Hyperfactory.

Meanwhile, rival publishing house Hachette also launches its own coffee-table book about successful Kiwis this month. Titled Made in NZ, the book is a collaboration between journalist Chris Mirams and photographer Ross Land and features such people as Victoria Ransom. As if that’s not enough chest-beating for one year, high-tech entrepreneur Mark Hellier is also trying to put together a movie about Kiwis who have done great things but aren’t yet famous. Hellier, who co-founded software company Sonar 6, which was sold to a US buyer earlier this year for US$14 million, hopes to crowd-source the project. He has set up a website, newzealanderthemovie.co.nz, for those interested in helping.

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