For now I have to focus on activities that will earn back some of the lost earnings and investment in trying to get Punakaiki Fund off the ground.
One intent of Punakaiki Fund was to fund my time spent helping companies to grow, an activity which I really enjoy. Meanwhile a byproduct of the fund raising process was a sharp increase in the number of companies wanting help, and so now I find myself overwhelmed by potential free work and in debt.
So unfortunately for now I’ll be taking a tougher line on helping companies for free, and I apologise for that. My commercial rates are similar to those of a senior law firm partner, although I will consider discounted rates or equity for selected companies.
On Friday afternoon, just as Punakaiki Fund was closing well short of the $5 million minimum, I gave a speech (video) to close out the IITP annual conference. I was asked to talk about innovation and to be inspiring as the conference ended.
It was a tough call as the spectre of a public failure hovered over me, and as I felt even more disappointed that we would not be able to fund any of the many great companies who need smart money to accelerate growth.
But then I realised, as I put the speech together, that despite the failure of Punakaiki Fund, and of Pacific Fibre before that, that I’m proud to have been involved in both endeavours, that they both proved a market need and that I’ve learned a vast amount while staying true to my own standards.
I asked the audience members to consider whether or not they are working for an organisation that is seeking to change the world, and almost nobody could say that. Only a third could say they were working for an organisation seeking to improve the lives of their end users, which I find quite sad. I challenged everyone there to lift their standards, and to work within their business to change the world, the country and their end users lives – or to get out. The future economy of New Zealand will be driven in large part by the ICT sector, and we all need to stand up and take risks.
The worst thing that can result from trying innovation is failure. It’s happened to me twice in a row now, and look – I’m still here.
Tomorrow is the latest Apple event, apparently focussed on iPads. It’s time to dredge out my predictor from 2011. Black are the original predictions, red the results to date and I’ve put green boxes around potential releases this year. Missing is the rumoured iPad mini retina display.
The predictions are showing their age now. In general the product lifecycle, which Sony exemplified with the Walkman, is to:
- Release an early product in an early category, one that does the job but very expensive and primitive.
- Refine the product to be better faster cheaper, easily staying well ahead of competitors who are scrambling to introduce their first versions.
- Create upmarket (same price) and downmarket (cheaper) versions of the product to combat competitor products, that are competing largely on price and have low margins.
- Introduce a wide range of product choices (Colours, walkman sports) as the product moves to being fashion-led rather than technology-led. Competition is tough, so try to avoid fighting a feature war, but engage as you have to, and fight to maintain margin by locking consumers in somehow.
- Keep cutting costs and look to exit gracefully as the category is now very very low margin and declining volume. Look for the new category killers to take over or another category to disrupt.
In Apple terms, I see the classic iPod and iPod nanos are between categories 4 and 5 (Cheap, disrupted by iPhone and iPad), while the iPod touch and iPhone are moving from category 3 to 4 and the iPad from 2 to 3.
Apple have superb lock-in with the App-store, but sadly apps themselves are subject to a rapidly accelerated version of the product lifecycle process, and so Apple’s hold on the ecosystem could be a lot more fragile than it appears. In any event the content providers of music, movies are agnostic about which platform their work appears on, and the same is happening with apps.
Just launched by Curative and 96Black funded by gambling money from Lotto is The Harbour, a site for those affected by harmful sexual behaviour. It’s very well done (aside from some initial paragraph spacing issues and missing links.)
The content does not take long to read, and it’s good for all of us to get a reminder or lesson in what harmful sexual abuse is, and is not, and how both offenders and victims can be helped. For example only 2% of adolescents and 5% of adults re-offend after completing treatment. The list of support agencies feels short – and that’s sad.
One neat feature is the hide this page button:
Hovering over it gets this message:
In my (contrived) case hiding the page goes to a nice “safe” misogynistic opinion piece from Bob Jones. Why the Herald publishes this crap I don’t know, but regardless, kudos for the team behind The Harbour at least for advancing society.
I’m really quite sad to be missing this year’s CEO Summit, but Punakaiki Fund has to take preference. The summits are aimed at CEOs of medium- and larger-sized NZ companies, and combine an audience from the design profession with the CEOS, management teams and a host of high quality local and international speakers.
They are one of the hidden gems in NZ business, and while I’m not there, two CEOs from companies I’m associated with are.
If you are on Twitter then you can follow along with the #BBDSummit hashtag. I do hope that someone else will take up the mantle of blogging the event this year. Otherwise, here is some reading from the past events.
Monsanto just purchased Climate Corp for US$960 million.
Climate Corp is a company that is really good at predicting weather in a small area (like a farming region) and provides insurance against poor weather conditions like drought to farmers. It was started by two ex Googlers.
Do we have anything like this here? We certainly have he building blocks, with MetService, who are very good forecasters, and a host of companies and people who are experts in sensors, farming and so forth. The insurance part is not that hard, and we have plenty of people here to help.
This article from March 2013 by Dr Michael Naylor in the NZ Herald states that insurance companies in NZ are not covering drought. If so then there is really an opportunity here.
All of this is occurring in a world of changing climate – so there’s a huge advantage to a firm that can understand everything that is going on and earn margin for doing so.
Could someone could put this together? I suspect that not only do we have some structural advantages, but that ownership of Climate Corp under Monsanto may cause issues over time. Alternatively a NZ company could take this in another direction.
Wal*Mart thought it could save money by shifting towards a higher percentage of part time temporary staff, who had to reapply every 180 days. They also increased the number of hours required to qualify for healthcare from 24 to 30. These to me were signs that senior management was lowering its commitment to putting customers first in order to chase short term profits.
The results were obvious, especially in retrospect – poor service resulting in poor sales. Wal*Mart products were not getting stocked in stores, queues were long and sales suffered. Meanwhile their staff, as part timers, would not get the health care benefits that are so necessary in the USA.
Their competitor Costco paid staff 40% more and their profits lifted by 19% in Q2.
So the recent announcement that Wa*Mart will be moving 35,000 staff to full time status (with health-care benefits) is going to be well received by both staff and, eventually shareholders.
The lesson is that doing the basics well, something that Wal*Mart used to do, is what makes for great businesses and great returns to shareholders. It also reinforces that shareholders maximise their return by making sure that all stakeholders are winning.
It reminded me that in New Zealand we have our own version of Wal*Mart – The Warehouse. And it also reminded me that the team there received little kudos for the introduction of a higher pay for a higher trained workforce. As investors and shoppers, if not staff, we should all be thanking The Warehouse and demanding more of the same.