Christchurch as an attractive location for tech sector businesses

I think the focus on "start-ups" in Christchurch doesn't really serve us well. As @craigrichardson1 says, we need to have some exemplar companies out there... but I disagree that we need a lot of huge companies ($500M per annum). Part of my concern for Chch is that we're trying to copy other parts of the world. We're letting them define the game, trying to change our natural inclinations to meet with overseas expectations. I don't think that's going to work for us. I think we have an opportunity to be innovative, not only technically, but organisationally.

I think we should be focusing on building a tight, supremely competent, agile ecosystem of excellent service companies each of which can stand on its own, but working together on specific project (e.g. product development, large gov't tenders, etc.) can turn out better work, more quickly than any $500M company ever could.

• We need clever ways to keep those allegiances economical (i.e. cheap to initiate and complete) and mutually beneficial.
• We need to become more savvy in building things the market wants or needs (we need to value smart marketers, and not accept standard marketdroids or sales people).

I think we also need to recognise that people in our industry are almost never motivated primarily by money. Once they have enough, then they're only interested in quality of life and opportunities.

I also think we could focus on building great services companies instead of start ups. Start-ups are like playing Lotto, with similar chances of achieving success. Services companies grow more slowly and will never achieve the sorts of profit that a really successful start-up might... but for every successful start-up, there are hundreds of viable services companies. They're where great talent develops and matures.

Services companies have more value to our community, because they're more integrated with the community. That also makes them much more likely to stay put in NZ than be bought up by foreign interests. That's a good thing, in my opinion. The other bonus is that service companies tend to become very conscious of the market place and providing market insight for those who eventually do create a start up - one that actually meets a clear demand.

In a virtual marketplace, the line between services and products becomes very blurred, so I think if we use the sorts of expertise we can attract to Chch (I, for one, would be happy to let the high-flying entrepreneurs stay in Silicon Valley :)) I think the technical capability we can attract is peerless. I think we just need to:

• work out how our cornucopia of great small tech companies can act modular and combine and re-combine to work together where it makes sense,
  
• put together a united front to convince our gov't to buy services from us instead of overseas multinationals (we could, for instance, be backing NZRise alongside the more US corporate-focused NZTech group - see their constitution), and
• figuring out how to market ourselves to the world more effectively.

I do agree with Craig that it would help us to have some more large companies here and would like us to have a strategy to attract them, my post was only referring to growing new companies.

Regarding startups I wasn't only including product-only startups but all early stage tech businesses; service focused, product focuses, and hybrid like Jade and SLI Systems. More entrepreneurial people finding new ways to start and grow local businesses is a good thing.

Many innovative startup product ideas have come out of companies that would consider themselves to be pure service companies.

The reason Silicon Valley focusses on product startups is the amazing economics that can be achieved. Locally XERO is a good example of this where their product is used by hundreds of thousands of companies in 100+ countries and has a market cap of approx $3b. Very hard to get this wealth creation using a pure service model. We do have to do things differently but what that looks like is up to us.

I'll wade in on the topic of attracting and retaining talent. "Lifestyle" for many who have come to New Zealand and Christchurch doesn't mean skiing and surfing, it has much more to do with a safe and friendly place to raise a family and have a healthy work-life balance. Good early childhood education and public schools. The ability to have your kids walk or bike to school. Being able to dry your clothes on the clothesline and bring them in smelling fresh. To me, these are the factors that differentiate NZ and Chch from other places in the world with high tech opportunities. Yes, the mountains, bike tracks, walking tracks, surf, fishing, and general outdoors pursuits are a bonus, but not the core attraction. Being a family-friendly place is how we should differentiate ourselves. I don't think it's well-understood how important this is.

With respect to retaining locally grown graduates, I don't really think that's an issue. What we need to do is to attract them to come back after they have left. A returning kiwi is almost always more valuable and more loyal after they have done their OE and returned to set down roots.

I also think we could do a lot more to make Christchurch an attractive place for professional women. This forum is typically male-dominated. I'd be interested in hearing what others - especially women - think of differentiating Christchurch as a desirable place for professional women to come. Perhaps things like supporting opportunities for professional advancement while still having a family.

As someone who emigrated to Christchurch from overcrowded Britain with young kids 10 years ago, I totally agree with @edwegner that NZ / Chch is a very attractive proposition for international tech workers with young families looking for a stable, healthy upbringing with good education. We can continue to compete strongly in this space.

Unfortunately the flipside of this family-friendly offering is that there's not a lot here for 20-30 year olds and they tend to leave at the first opportunity, not returning until they have family themselves, if ever.

Personally I think we need to consciously seek ways to invest in retaining and attracting more younger workers / entrepreneurs to Chch: as @craigrichardson1 mentions above all this means paying them internationally competitive wages and making the city more exciting for them outside work.

This implies actively encouraging a more lively cultural scene than just the great outdoors: nightlife, arts, entertainment venues. Chch has always fallen down on this and we consistently lose our young people to Auckland, Wellington and further afield.

Recently there have been some successes at making Chch's external image edgier and higher profile: the Oi You! street art exhibition... continued quality of TEDxChch... Ministry Of Awesome attracts a healthy crowd every week ...(I'm right behind @kailacolbin's idea of bringing Singularity University / Singularity Summit to Chch)...but there are no mid-sized music venues...nightlife is dead Monday-Thursday...arts festivals targeted at retirees...

It's not really a tech industry conversation but it is crucial to attracting talent.

A few comments in response to the (excellent) contributions on this thread:

• @craigrichardson1 absolutely agree that Chch tech businesses shouldn't be aiming to compete based on being cheap / low-cost. Successful businesses aspire to being the best in their class internationally and therefore need to pay internationally competitive rates. Period.

• @craigrichardson1 The easy access to so many outdoor activities around Chch is a selling point to a certain niche group of workers: there's no harm in emphasising this as a component of the overall external message; but agree it shouldn't be the lead message.

• Let's just ditch the word "lifestyle". It conjures up images of workers shutting down their computers at 5 to 5 every day and walking out the door. Play hard. Work harder.

• It seems to me that the rest of the world gets confused (and turned off) by the various words "Christ", "Church", "Canterbury". I'd be interested in any research out there on how NZ is perceived but the most valuable meme to me seems to be "South Island", "New Zealand". Hence any messaging needs to place Chch in this context - eg a footer of "City of Christchurch | South Island | New Zealand" on all comms. How the rest of the world sees us is different to how we see ourselves...

• @davelane @geoffbrash @craigrichardson1 I'm not convinced of the need to specialise into particular technologies / markets / business types. Instead it seems to me that the key to self-sustaining local tech industry growth is to encourage diversity of businesses and develop the long term capability of our entrepreneurs and investors to grow and recycle capital.

• So in terms of defining a tech strategy for Chch: I'd suggest a stocktake of where we're at right now in terms of numbers of large / small businesses, product / services businesses, locally / internationally owned businesses, domestic / export businesses - and expressly aim to grow the the numbers and market cap in each of these segments incrementally over the next 10 years.

@nigeljohnson I recently came across an anecdote that in the US / Silicon Valley, investment in university spin-off companies weren't so much about the intrinsic value of the "IP" - they were effectively "acqui-hires" to encapsulate the team of students / researchers involved.

In order for industry / investors to be interested in university spinouts, it's fundamental that the teams need to have entrepreneurial DNA in the first place and want to develop their research commercially rather than stay in an academic ghetto - otherwise in many cases it's just too hard to "graft" that commercial capability on later...

So as you say, a challenge for NZ universities is to foster entrepreneurial rather than academic DNA in students.

Trying to 'sell' Christchurch as an attractive location is a bit like trying to make water run uphill. People who want what the place has to offer will find us. As others have said, they are almost certainly a different demographic to the group we lose. We need to learn to make better use of the talent we have, and which we attract. The flourishing startup scene cuts both ways; both in diverting talent away from the durables, but also as a catalyst for retaining more young talent, as well as an outlet for the entrepreneurial among our arrivals.

Likewise, investing a lot of effort into trying to make academia and industry work more closely together is also another uphill watercourse. Both the entities and the individuals involved have quite divergent drivers. By all means try to create opportunities for them to interact, but better to concentrate on exchanges between startups and established companies perhaps in order to exploit complimentary needs and skills. Comparatively easy to do in a small highly-interconnected city.

Totally agree with @craigrichardson1 and @benreid et al about focussing on building those larger (and medium-sized) companies.

I agree with @benreid that we need to do a stock take of the companies we've got here in Chch - it'll be surprising I have no doubt! Just remember, we're not in Southern California, and we haven't got a compact city centre like Wellington... Reckon we have to find our own strengths and create an innovative local marketplace, where small companies can grow, around what we've got rather than copy what's worked elsewhere (because I suspect we'll find we don't really know why it worked elsewhere).

Re Anna’s comment re capital, there is money about but I believe some businesses need help in preparing pitches - ROI and Exit strategies. Chch and Canterbury also need a better profile to attract interest of national and international investors, emphasising innovation and growth eg We have NZ's fastest growing regional economy at 6.6% GDP growth for the year ending 2013. Our focus does not have to be sector specific but should stress our innovative marketplace. Over the years I have heard internationals say that some of their best research is done in Chch. To borrow from Cambridge (if this is still appropriate), we could promote Chch as the largest R&D ICT cluster in South Island (or NZ)? South Island's (or NZ’s) No 1 location for commercial R&D spend – ?% of the total. We should include information about our Tertiary Institutes, numbers of students as well as case studies eg Taits lead the world in communication technology and has now built Tait Technology Centre as a base for research in international innovation.

To comment further re building linkages, I believe there is value in strengthening connections between high tech businesses at different stages. Locally this is happening as part of Business Mentors NZ. Experienced business people give up their time to benefit smaller businesses trying to grow. The experienced see value in contributing to the local community and the benefits to the less experienced are enormous. With a little effort this could be expanded to assist those with similar needs at a cluster group level. A stocktake could identify these.

Establishing a high tech cluster group internationally could benefit from the considerable resources available if the UK is the chosen location. UK Trade & Investment (sponsors of NZ’s high tech sector) is a resource for a business or group wanting to set up a legal entity in the UK and develop international trade. A Memorandum of Understanding exists between UKTI and NZTE that focuses on four main areas: increasing cooperation in inward investment, trade, collaboration in third markets and the sharing of best practice. This offers opportunities for further collaboration, particularly in positioning each country not just as a market destination but as a platform into other markets.
UKTI sector specialists could advise on market opportunities and trade potential. Assistance on the ground could be available through a business development partner such as Exemplas (www.exemplas.com) whose mission is to develop collaborative strategies with partners from industry, academia and government. Such a partnership would helpful as NZ (and Chch) is not a priority market for UK/EU businesses. A better Chch brand would help address this problem.
On the ground there are organisations such as the Technopoles and Incubators where a group of NZ companies could settle and develop networks. This could lead, for example, to their being part of a supply chain or sharing resources such as warehousing and distribution.

As has been stated by several above, the "lifestyle" pitch cannot be the core of our proposition. @edwegner articulates well what the lifestyle proposition is, but it's complementary not core. I'm aligned with @craigrichardson1 in that part of the core has to be exciting career opportunities with marquee tech companies - tech companies that create (or bring into region) infrastructure, capital, and contemporary management and business skills - in turn fuelling start-ups and attracting even more companies to Canterbury. I'd like to see a tech sector strategy that is bold in its vision rather than one that tinkers with what we have today. What would it take to build/attract 3 x $500M in 5 years as @craigrichardson1 suggests? What will it take to get the chain reaction started?