On The Nation: Start Up Panel

On The Nation: Start Up Panel
There are currently between 400 and 600 companies defined as start-ups in New Zealand. But in such a small market, how hard is it to succeed, and what’s crucial to that success? Well, we’re joined now by the directors of three very different start-ups – Cecilia Robinson of My Food Bag, Robbie van Dam from Good Nature and Bex de Prospo from Anteater New Zealand. Thanks all for joining us this morning. Cecilia, if I can come to you first – My Food Bag is worth, what, $100 million now? How much did it cost to start up, though, and where did you get that seed money from?
Cecilia Robinson: Well, look, in the early days, we were a group of founding directors and shareholders, and we raised some capital between us, but I think we were really aware of the fact that we needed to think lean and make sure we were spending money on the right things.
So what did you need to get off the ground?
Robinson: It wasn’t as much as you probably would have thought at that point. It was, yeah, probably 200,000, to be honest. But, you know, at that point, the market was new in New Zealand and we were kind of first-in advantaged, so we made sure that we spent the money that we had and we spent it well.
So where did you get that cash from? Did you have to rely on houses to fund it like some people do or what?
Robinson: I mean, you totally scrape it together, right? And for us, we were very much—we had another business and we had a young child, so you’re basically living off very little is the answer for that. So you take that risk, and hopefully, you see some reward.
Robbie, you make traps to kill predators. I’m just wondering, from when you first got the idea till when you go to the market, how long is that period of time?
Robbie van Dam: Well, it depends what type of product you’re putting into the market, but for us, we had to invent the technology, so, you know, there’s nothing on the planet like it. So we had to start right at the very, very beginning, asking the very basic questions, in a way – why do you do what you do in terms of the large-scale conservation pest-control initiative, I guess. And so it was at that point, you know, that really, all of our energy is focused on purely inventing technology, turning it into a product, coming up with something and put it to the market, you know, and as many entrepreneurs say, if you love your first product, you waited too long. And we certainly don’t love our first product. So we were desperate to put it to the market, gauge what people think and then shift and move to it.
So when you’re doing that, you’re working on an idea, do you have another day job? What was your day job?
van Dam: We ran three other businesses. So, there were three of us that started the company, and we’re product designers, so we were making some pretty furniture. We exhibited in Milan at the furniture fair. We did some—
This is polar opposite, though.
van Dam: Polar opposite, you know, and not to be rude to that – we love that – but it is really a cool-fest. It’s about building a brand based on how cool you are, how edgy you are, whereas this is – we saw this as how can we change New Zealand? What’s our contribution to the shape of New Zealand? How can we make this a better place for…
So you saw a problem, and you went about providing a solution for it.
van Dam: We actually set out, sort of, a one-year goal, a five-year goal, 10, 20, and 200-year goal, and it sounds absurd, but think of Toyota, you know. They wrote a 50-year business plan, and that was six years ago. They talked it over. And they had that as a milestone. Our intention is to build forests that our kid’s kid’s kids, you know, can sit under.
Bex, you’re the newest to this. I’m wondering, how many ideas did you go through before you decided this was the one that you were going to go to market with, and briefly tell people what it is you do as well, could you?
Bex de Prospo: Sure. So, Anteater is, fundamentally, a sustainable food business, and what we’re doing is wholesaling high-quality, edible insect products to top restaurants and special events around New Zealand. So, ultimately, we’re hoping to mainstream the idea of edible insects as a viable alternative to conventionally farmed meat.
So, did the light bulb just go on, and you thought, this is it? Or did you wade through a hundred other ideas?
de Prospo: The truth is that our business was launched completely back-to-front. I met my business partner at a young entrepreneur’s event called Start-up Weekend in Christchurch, where he pitched this idea, and I thought that he was a crazy person. But within a week, suddenly, we had customers and we had momentum on board, and ultimately, it just snowballed from there. We really built on this huge foundation that we found in the high-end food community in New Zealand, and all of a sudden it was a product like truffles, like saffron. It was really exciting, new, local flavour for our food clients.
So for all of you, I’m wondering, what’s the biggest hurdle you faced getting your idea off the ground and getting your business going?
Robinson: I think an idea’s nothing unless you do it right. So for us, it’s all about execution and making sure that you’re really solving a problem. So with My Food Bag, we solved the ‘what are you having for dinner tonight?’ problem. And really thinking about the customer and having the customer at the heart of every decision you make.
Because some people look at the idea, and they think, ‘Whoa, um, that’s kind of not reinventing the wheel; it’s reminding people about the wheel and bringing it back.’
Robinson: Yeah, I guess so, and for us, you know, it was really resolving the problem in terms of not only— Because I think people have thought about it before, but actually delivering all of the ingredients with the recipes to your door really solved that problem, so, yeah.
What about the single biggest thing you can pinpoint as leading to your success?
de Prospo: I think for us, it’s been largely about strategic decision-making. You know, there are a lot of other people that are tangentially in the same industry that we’re in. But we found that it was really important for us to start with that high-end client, to make people understand and validate this idea, because there’s a lot of people that on the face of it think that it’s silly, or that there’s a novelty factor in it, and we really believe in the mission of what we’re doing. So that strategic alignment has been huge for us.
What about you, Robbie?
van Dam: Yeah, I think with us, being the first in the space that we’re working, of course, the technology that we’ve invented is polar opposite to our two competitors – a toxic or a very intensive trap. So we have to school people on what it is.
We should tell people what it is – a non-chemical means you’re using to eradicate pests.
van Dam: Yeah, so we’re using a non-toxic methodology, but we can be very controlled about the thing we kill and can—most importantly, we respect the species that we’re killing in that the animal – there’s no need for a sentient being to go through this suffering in order to make our lives a little better. Our view has always been far greater than New Zealand, and the investment—the investment into this technology has been to support global initiatives around controlling pests, because everyone is suffering biodiversity decline. So our view has always been that New Zealand should be supported by the rest of the planet and be a good global citizen and have our issues in return—
So an ethical basis to your business?
van Dam: Totally, totally. And every morning, when you wake up, having a nice, strong, underlying ethical basis – you don’t check it at the door, you know. Every decision is driven by those views, and the consumer respects that.
I find it really interesting that none of you are tech start-ups, because there’s a lot of talk about tech start-ups. How do you feel about the amount of emphasis that’s put on that area?
Robinson: Well, I think we would probably see ourselves in the tech space, because we’re in ecommerce, you know. We actually do invest quite significantly in that space. So we’re probably not a clear-cut tech start-up, and I think we need to think about how tech start-ups are defined nowadays. I definitely wouldn’t consider My Food Bag being in that space, but as I said, it’s not necessarily clear and black-and-white.
Yeah, you’re nudging up against it with the online use.
Cecilia: Absolutely. Totally. So, you know, it’s online purchasing. So for us, we see ourselves definitely more in the tech space, and probably what people think us as too.
Bex?
de Prospo: I think that’s probably similar for Anteater. I think agritech is a huge momentum behind that industry, and I think that as we grow and become more of an established entity, that we’ll definitely be looking at tech solutions for how we can further our own business.
van Dam: It’s just another— Ultimately, technology is a massive tool to everything we do, in the same way as consideration for the way you make your product — you know, environmental considerations… It’s just another tool. It’s a way to get product from one side of the planet to another, and then once you’re in country, how do you deliver on what exactly it is to be a good supplier of product? Is that someone can order it today and have it delivered tomorrow. So, that’s still underpinning and incredibly powerful, but we’re about building a really— for the long term, a very, very sustainable business — growing it from a technology base and utilising the brilliance that is the technology that we’ve got and using it to deliver a different ethic.
I’m wondering is there enough support for people who are just starting out from the government. You’ve talked about a group of you funding it yourselves. Robbie, I think you got a DOC contract to start off with, didn’t you? And you won a prize.
de Prospo: We did, which actually wasn’t governmental, so I can’t say… But because we’re sort of a direct by-product of the start-up ecosystem, we have garnered a huge amount of support, both from private and public institutions. The prize that we won was through the University of Canterbury’s Entrepreneurship Centre. It was the largest young entrepreneurs’ competition in the region, which certainly has helped us bootstrap our business. But through that competition, we got ourselves aligned with a whole range of other organisations, like Callaghan Innovation and Canterbury Development Corporation, so we’ve managed to garner a huge amount of support by building those networks.
Robinson: I think there is room, though, to be honest with you, for the government to be able to provide more support to start-ups. And I think that for us, as a business, there we a lot of people who looked at us and thought, “What are you doing?” and “You’re either going to be successful or…” So I think there is definitely room for some improvement there as well.
Financial or mentoring?
Robinson: I think probably from both perspectives, to be frank, but look, I think a lot of start-ups are looking for financial input initially, so I think if there’s a more robust system around some of the programmes, maybe that would be beneficial.
Because at the moment, there’s a 300 million venture investment fund, which goes into grants for businesses. Do you think it’s fair for taxpayers to invest in the future wealth of companies like yours?
van Dam: Personally, from our perspective, we had an innovation fund application. So, it was a small amount of money over the length of the last 10 years. It works out about $55,000 a year is what we were given. But in return, in total, there was $600,000 given to us, and we pay that back in taxes every couple of quarters.
Robinson: And not only that, but in employment. And can I say My Food Bag employs 130 staff. We’ve got several other suppliers that have significant staff resource. My Food Bag is growing the New Zealand economy alongside our suppliers. So we’re proud of that. It’s an investment in the country.
We like to talk about Kiwis being really adventurous — number 8 fencing wire and all the rest of it. But when it comes to putting everything you have on the line to pursue an idea, are we risk averse, do you think?
van Dam: I think the one thing that we’re really bad at is constant improvement. So, we’re very good at inventing. There’s no denying number 8 inventiveness is in our genes. The issue is that that’s generally where we stop, with notable exceptions — you think of Fisher & Paykel Healthcare, Formway Furniture, all these New Zealand product companies. The critical element is that they delivered on an idea, and then they continued to support that and continued to grow that and continued to improve that. And I think most—
So not pushing ourselves hard enough?
van Dam: I think, fundamentally, it’s actually support from the community, from all of New Zealand, to understand, actually, what it takes to make a really, really good product. It’s not that you’re going to hit the money on the first product. And that is— You know, you think of Allbirds sneakers — beautiful woollen product, and it’s translated into an amazing product — the first product, I’m sure, that they were embarrassed about. But people bought it. Kickstarter supported it. We all took it on and thought, “Yup, this is a brilliant idea. They’re not perfect yet, but the second time round, they are incredible products.” And that is the key — that we continue to support these people and continue to support their ideas. And it’s the ongoing improvement that is actually the thing that we’re really buying into when we buy a product.
We’re running out of time, but I really want to ask you guys about this because the education system— Are we doing what we need to to turn out young people who are entrepreneurs? Are we teaching resilience and innovation? Do we need to? And is there some stuff that we need to get rid of?
Robinson: I think there really is. I mean, there’s definitely some movement, and there are some really good programmes out there that are really exploring that side of it. But can we do more and can we be better? Absolutely. And I think that’s really critical, and I think that it’s really important for people who are in the know and who are executing great businesses out there to be involved in that process. So that’s what’s exciting for the future.
Bex, what about you? Do you think you learned what pushed you forward in your business from school or somewhere else?
de Prospo: The truth is that I went through a sort of standard school process and went to uni, and I got a degree, and I got a master’s degree, and then I went into the workforce, and actually, last year I did a graduate diploma in innovation and entrepreneurship through Ara Institute of Canterbury. And I think that, for me, pushed me in ways that my previous education never had. And those skills, the practical application of entrepreneurial and innovation skills has been the core of what’s helped me to launch this business.
Can you start that process at school, Robbie, though?
van Dam: I think we’re employing today people coming out of universities who while they were 13 are using the software that we learned at the end of university. It’s remarkable, the education. So I think, though, what is missing within education is actually teaching people what a start-up is, what being entrepreneurial is, what a business is, how a business runs. And we were talking earlier about Sweden and that it’s fundamentally ingrained and entrenched what Nordic design is. And in New Zealand, we maybe take that for granted that we don’t need to learn that. And I think that’s where education lies.
All right. Really interesting to talk to you all. Thanks for joining us this morning.
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