$91 million for “new visa processing technology”

Buried in an otherwise excellent report on NZ Tourism (found through this NZHerald article) is the statement:

Immigration NZ is investing $91 million in new visa processing technology that will enable visitors to apply for their visas online”

That feels ridiculously expensive, but overall this is very important to NZ and we need to make sure it works.

1: It’s expensive

The mind boggles. $91 million is an extraordinary amount of money to spend on any computer system. How unreasonable is $91 million?

  • $91 million is 758,333 hours or 431 person-years of work at an average all-in cost $120 per hour.
  • While $120 per hour is relatively cheap for contracting, at 8 hours a day and 220 days a year this equates to an income of $211,200 per year per person.
  • Perhaps there is a lot of hardware in this budget, but $91 million will deliver up to 30,333 pieces of hardware at $3000 each.
  • Maybe there are new operating costs involved (although the business case pointed to savings.) In this case taking $21 million from the budget would bestow $2.1 million a year for 10 years, which is 10 of those expensive $211,200 people per year, or, more reasonably, over 40 people averaging $50,000 per year.

2: It’s well underway

Implementation of Immigration ONLINE (also known as the Immigration Global Management System, or IGMS) started in February 2012 following Cabinet’s approval of the business case in November 2011. The project is on track to complete the majority of functionality by the end of 2015, including online visa applications and processing, the use of electronic documents, automation of simple tasks, access to the system by approved third parties and significant improvements in identity management. Remaining functionality that is not central to a quicker and easier user experience, relating to, for example, retiring legacy systems, will be completed by the end of 2016.

It’s all being being done by Datacom – which as they are a local company means that the money is cycled back into the economy, and diminishes the net cost to New Zealand considerably. One could even argue that there is a multiplier effect which creates a net gain for NZ, as not only are Datacom staff spending money in NZ, but the tax (GST, PAYE and income tax) goes back to the government, while the owners of Datacom are the government-owned Super Fund and a local family who plough (very smartly) money back into New Zealand through investments.

3: However it’s worth it.

The project, even at the ridiculous price, is easy to justify if it increases migration and tourism. One presentation I found from Immigration NZ, for example, states that migrants add $1.9 billion to GDP each year. I don’t doubt that, and they also point out that education alone brings $2 billion of export earnings. So getting this right is really important, and the sooner the better.

How is it going? Another presentation, from April 2013, stated that end to end student processing was targeted for first half of 2014. Today it’s still ‘please complete the form“, and prospective students have a very long PDF to print out, and must supply a vast amount of physical evidence like photos, medical and police certificates, their passport and evidence of their ability to pay tuition fees and that they have a place at an educational institution. It’s a nightmare, so simplifying it is well overdue.

In January this year FutureGov reported that the project was on track. Let’s hope so,

Overall: Let’s make sure of this one

The concern with large projects like this is not just the cost, $90.5 million in this case, but that the complexity makes them much harder to deliver a usable system that actually makes things easier. Nobody wants another Novopay, and I am sure that the conversations in the corridors of Immigration NZ, government and Datacom are held with that in mind.

This is arguably more important to New Zealand than Novopay (though I would be wise not to argue that 1-1 with an unpaid teacher.) Even during the worst Novopay periods teachers were still coming to work each day, and good for them. This Immigration system will, amongst other things, help or hinder students from paying  (generally tertiary) teachers at all. It’s also a critical piece of the tourism and immigration puzzle, both important drivers of our economy and society.

So I hope the government, Datacom and immigration stakeholders are well on top of this, and the project continues, on track and without fuss largely underneath the radar.

Posted in NZ Business | 5 Comments

Do you have your business licenses?

New Zealand rightly gets credit of being an easy place to do business, but sometimes we forget. As a reminder here’s an excerpt from an article on the tax implications of Kickstarter projects:

In the United States, if you accept money for goods or services above a certain threshold, or at all for certain kinds of work, you probably require all of the following:

  • A business license in every city in which you work in person. If you make something and deliver it, it’s possible you need a license in the destination city.
  • A state business license, which is connected with state sales or other taxation. The license may have specific extras you need, such as an assumed business name (the dba, “doing business as”) or registration for certain kinds of business. (Many business types, varying by state, require registration, certification, licensing, a degree, bonding, and insurance!)
  • A reseller certificate or exemption permit if you buy services or goods at wholesale intended for resale. For instance, in my case, as a new book publisher, I need to give a copy of this permit to the printer that is making my hardcover books. It needs it for its files so that it, in turn, can show its taxing authority that it properly did not need to charge me sales tax on its sale of finished items.
  • A federal Employer Identification Number (EIN), which is used by businesses in lieu of a Social Security Number (SSN). 

In New Zealand you need a GST number.

Tax is much much more complex in the USA as well, with city, county, state and federal income taxes for businesses and individuals, taxes along with sales taxes and even a use tax, on items that you buy from outside the state and use within the state. 

Our own taxation system is structurally far better. It’s still far more complicated than it needs to be, but there seems to be a recognition that it needs to improve, with some recent moves to reduce the pain. However there is still a long road ahead, and the IRD’s very scary IT project to complete.

While the USA market is unfathomably vast, it is expensive and painful to start or grow a business in the USA, and these regulatory barriers to entry are to the advantage of incumbent or well-financed businesses.

It’s obvious that having a presence in the USA and other large markets is important for NZ exporters, even web-based ones, but addressing the world from New Zealand does have significant advantages. And we get to live here too.

Posted in NZ Business | 3 Comments

No more little children being dropped off by their mummies

When I went to school over 30 years ago the norm was to walk, cycle or take public transport. Similarly a colleague I spoke to yesterday said that when he went to school in Tauranga 20 years that there were hundreds of bike racks at his school and it was hard to find a place to park his bike. And I talked last night to someone from Hawkes Bay, and when she went to primary school a little over 10 years ago cycling was the norm as well.

But there has been a dramatic shift to little children being dropped off by their mummies (that’s how we would have cruelly described it at school) over the last 20 years. And the result of the critical mass shifting is that it’s now deemed too dangerous for kids to cycle or walk to school. But a lot of that perceived or real danger is the very traffic caused by those car driving mummies.

It’s a vicious circle, exemplified by another conversation yesterday with someone who firstly talked about how she used to cycle in Auckland, then about how cycling in Auckland became too dangerous because of the cars and poor infrastructure, and then about how cyclists in Auckland are painful and dangerous when she drives her car. I struggled to get her to understand the causes and effects.

We need to break this circle of despair, and get people back onto the streets, walking and cycling. We are seeing this start in some cities, Wellington especially, and successes in Auckland with multi-use areas like Fort Lane and Elliot Street. The end game is that New Zealand has vibrant walkable, liveable cities, with incredible people-filled street life and places to live that attract and retain the best talent.

So it’s great to see the Greens today launched a cycling to school policy. It’s a clever start.

Firstly, it exists. I would like to see policies from the other parties about how they will create better people-centric cities, and how they will also remove a huge number of cars from the roads at rush hour.

Secondly it focuses on schools first. That’s cheaper, as the infrastructure will be in relatively simple residential areas, but it also allows for dramatic uptake rats as a school’s students switch en masse from cars to bikes and walking. I think the Greens policy needs to provide for more support to each school as they embark on the switch to walking and cycling, helping them, for example, work with council on the infrastructure plans and with  rider instruction, education and campaigns to get parents and kids to switch to the new modes of transport.

Thirdly it is safer and smarter. Getting people out of cars and moving creates healthier lifestyles, lowering obesity rates and, rather interestingly, that little exercise in the morning increases capacity to learn. But this policy is also taking responsibility for delivering kids safely to school, and that means physically separating cyclists from cars on busy roads, cunning moves to create safe shared environments on suburban streets and the shift in driver attitudes that will come when over 1,000 kids cycle to one school.

The policy grants $50 million a year over four years for the schools and councils that grab it first. I’d like to see the early schools competing for the first round of funding, and a great deal of care, learning and experimentation taken with the initial roll out. If the programs in the first few schools work well, then the demand will naturally spread to other schools, and the funding needs to be available as it does.

Above all — I can’t wait for a future where the kids can take back the streets and hoon to school on bikes. It’s so much fun, and once it becomes cool again then who knows, maybe us adults will want to start walking and riding as well. At some stage, and please make it soon, we will have critical mass, and people around the world will start talking about our cities in revered tones.

So good for the Greens, and I look forward to the other parties responses.

Posted in NZ Business | 7 Comments

Finding great advice and advisors for founders

There are a few different sources of advice for founders, with the most important ones being end users and paying customers. Below I have put a list of sources of advice in  order of importance, just to push the point that the best form of advice comes from actually doing stuff and observing the results.

The focus of this post is to answer a question that comes up a lot – articulated by one person earlier today as:

 I would dearly love a mentor/investor with that sort of experience, do you have any advice for who to approach?

I really dislike that word mentor, which to me has connotations of a somewhat contrived, unbalanced and paternal relationship. That could be just me, but I prefer the word “advisor”, or “someone you had a coffee with once”, so if you ever ask me for help please keep that in mind.

1. End Users

These are the people you are building your products and services for, and it’s critical that your entire business is built around them. So go ahead and immerse yourselves in their world. Observe them and ask open questions to determine their unmet needs as the first step in the design process. Later on watch them use your prototypes and successive versions of products. Go hang out with them at their conferences and hire people from their community as you grow.

2. Customers

These are the folks who pay for your products, and so it makes a lot of sense to observe where they want to spend money, and what is and how it is easiest to sell. But be careful to balance short term revenue with that long term unmet end-user need. The real value is in the latter, though you may need to former to keep your business afloat.

3. Company 

You have access to a vast amount of knowledge internally. The customer service and sales teams are close to the customers, but so are the people who collect money. At the beginning these are often the same person, but as you expand make sure the communication continues. Make sure that everyone in the entire team contributes to building up the knowledge about your business, and to your short and long term strategies. There are lots of ways to do this, and it’s also important not to distract from the core goals of getting work done. Ultimately leadership is about helping people, rather than telling people, so if you find that an isolated group is doing all the thinking then try to change things up. At the same time make sure that you have alignment  between the key team members, not just in what you are doing but also why and how.

These days we are also overwhelmed with data, so make sure you are both collecting it and also looking at it in formal and informal ways. I like seeing daily, weekly and monthly reports, but also to be able to play with the data and make ad hoc queries. Your data should also contain internal metrics on how you get things done – such as average number of sales calls made per day and close rates.

Generally the task of collecting and presenting data belongs to the development team, but they are busy building the product and this can be neglected.  can neglect to provide this as they focus on delivering product, but please don’t, as understanding what is going on is how you learn. So make sure that it’s a priority to capture and report data as you go so that you can all understand what is going on and continually improve.

4. Fellow Founders

Now on to the interesting stuff.

It’s lonely being a founder or a CEO of a larger company. You can feel like you are inventing things as you go, and have nobody to turn to for trusted advice. My take is that the best people to share and learn from are others who are or who have just been through a similar situation.

So reach out to other founders and CEOs, and get into the mode of having occasional coffees or drinks with each other. Even better you may want to join a small founder or CEO group. There are founder and CEO groups that exist, but starting your own is the best way to make sure you can get into one.  So go ahead and progressively gather a mixed group of people from your town who are in the same position as you are. Start meeting regularly in a quiet and private place, not necessarily with any particular agenda, but with a view to have an informal conversation. You could add beer, food or guests, but the important features are that each person gets to talk and listen about their own issues, and that the group is by and for the founders or CEOs.

Larger groups can work too, but it’s much harder to get a productive session where founders are learning from each other rather than listening to a speaker or speaking to the same people in a beer or cocktail setting. To do this right you will need a facilitator who has a mandate to place primary emphasis on the founders or CEOs speaking and learn from each other. I’ve been doing this recently when facilitating TINShed events for a group of around 20 CEOs from the fastest growing TIN100 and TIN100+ companies, but I would hope that the people who meet in the room also continue conversations 1-1 or in small groups.

Larger events, such as awards nights and meet-ups can be very useful as well for sporadic catch-ups with peers, and for meeting new peers. Check out meetup.com for meetings in your area, and make sure to actually meet one or two new people each meeting. Don’t get drunk. 

Beyond this you can also reach out directly (Twitter works well for founders) to peers for advice over coffee, email or direct messages. While most very successful and well known people are usually incredibly generous with their time, they are also bombarded with requests. So start with people who are not yet in the limelight, and who are perhaps a bit closer to your stage of development

5. Reading

I do recommend reading a critical mass of books about business, but also to stop after a while, as they tend to get repetitive. These days you can often get the essence from a book within the first 3 chapters or so, with the remainder of the book is full of repetitive padding. Read accordingly.

My take is that business per se is actually very easy and the hardest parts are the things that distract and derail you. Find stories about people who started or ran great companies, and try to understand how they kept the focus on the right things, and how and why they made the decisions they made.

Industry websites, magazines and websites about early stage companies are also great sources of advice, but they can be massively distracting given the amount of “must read” news each day. You do need to keep up with your sector, so while I recommend occasional wider scans, you should visit a handful of sites regularly. It may also be handy to have an active and helpful presence under your own or your company’s name in websites, and certainly being on Twitter gives you a great firehose of information along with a community of smart and awesome people.

6. Paid Professionals

It’s really important to find great legal and accounting advisors. These are not your family accountant or lawyer, as you want to work with people who have worked with other early stage companies that you admire. So ask around, talk to them and get good references.

Once you have retained someone then please be a good client (especially if I have referred you).

  • Make sure that you are aligned as a team before asking a lawyer for help in drafting documents like shareholders agreements. Do your internal negotiations without your lawyer in the room, and trust the lawyer to write it up professionally. If your lawyer gives you a list of questions to answer, make sure you all agree on the answers before responding, and respond quickly.
  • Use your accountant as an advisor rather than a bookkeeper,  and make sure they have all of your data by keeping your Xero accounts up to date.
  • Trust your advisors – if you have briefed them well then make sure you thoroughly read what they have done but don’t second-guess them. Always read contracts and look at your accounts in detail – it’s your signature and responsibility not theirs.
  • Pay your bills on time.

One rather cynical way to think about paid professionals is that they cost $1 a word – spoken or written. This might encourage you to be very efficient with your own and their time.

It’s the same, in my experience, with designers and developers – give really good inputs and then stand well aside while they work their magic.

7. External Business and Technical Advisors

These are last in my list – but many people put them first. I believe that’s a mistake, and it’s better to work through the above first, but at some stage you will need help from people who can help you work on the business, not in the business. I’ve written before on the right mix for directors, and it’s the same sort of mix for advisors.

Free Advice. Great advisors can be expensive, but on the other hand people love being asked for help and advice is often free. There is definitely an element of getting what you pay for though, and waiting (or asking) for someone to blog or write about your business or homepage is not the most effective strategy.

To find advisors start with people you have met who you respect, and have coffees with them to update them on your business and get their informal advice. Ask them who else you should talk to, and keep having coffees. Over time you’ll call back the ones who are most useful.

It’s really fun giving advice – most people enjoy it. But it takes time and energy to give quality considered advice, and there is really only so much anyone can expect to give overall. So at some stage you should pick one or more people to have a more formal relationship that involves economic benefit. The mechanisms for this relationship are occasional or periodic consulting, retained advisors, advisory boards, directorships, shareholders and director-shareholders.

Retaining someone as a Consultant can be a nice way to test out a relationship, but also for longer term work. Either way I bring the person in for a few hours or days to see whether you can work together and obtain decent results with them. Try to get a tangible outcome from the work – not a report for a shelf, but some changes, agreements or decisions. You can leave it at this if you like, or choose to retain them formally or on an ad-hoc basis from then. Technical or business consultants may be particularly useful for a certain stage of growth only, say, so an ad hoc relationship is a good way to stop paying them when they are no longer useful. While a month to month advisory contract can work, be clear that it can end anytime at your discretion, and be clear on the expectations for the amount of work (minimum and maximum).

And speaking of which, all advisory work should be for short bursts of time. Advisors can help in small doses, but are an expensive way to get stuff done. So if you find yourself using them a lot consider hiring in the skill (from them or someone cheaper) instead. If they are good they should help you find their replacement.

Advisory boards can work for some sectors, like medical companies where the boards are stuffed full of scientists and doctors. The upside is that the members have no governance power, so you legally don’t have to listen to them. But if they start telling rather than advising (as they will) then they will in effect become a de-facto board of directors, and they may be in conflict with a real board. I don’t like them in general, and would prefer 1-1 relationships with advisors, which is often how these work in practice.

Boards of directors are the right place, for my mind, for your most trusted advisors. You need to have people who are comfortable with the governance role, who understand they are there at the shareholders’ discretion and who (collectively) have the appropriate mix of skills. Don’t be afraid to let them go when you are no longer learning, or need a different set of skills, and don’t be afraid to pay them well and demand work and results every month in return.

Shareholders and Shareholder-Directors are aligned with the success of the company, and it’s fantastic when they have invested a material amount for them in your company. Because they gave you money you can generally pay them less, or nothing, which is great. But while they will act a lot more like owners, there is the danger that they will act like the owner, or that they will act in their own short term interests rather than the company’s or founder’s. So you may need to deal with a strong difference in opinion, especially around raising capital. So, especially if they hold a small percentage, you need to retain the ability to let them go from their formal director role. You should also hold them to work and results commitments each month and make sure they are on the board for their advice rather than their money.

Shareholders who are not advisors are fine – just make sure everyone knows where they stand. They do have your interests at heart, so you can (and should) get in touch with them if you feel they can help, which they should be willing to. This can be especially useful around fund-raising time, but should generally sit in the background as quiet or loud supporters.


While you may end up with a handful (at most) of trusted advisors, ultimately you need to make the decisions yourself, do don’t cede authority. Many founders have managed very well without ongoing external help, so don’t feel you have to have any, though I do recommend it.

Posted in NZ Business | 2 Comments

Telecom’s Broadband – getting there but room to improve

I decided to check out with Telecom’s broadband sign-up page to see how the impact of Telecom’s ongoing transformation is affecting end users. Overall things seem much easier to navigate than previously, and the plans are better. But there are still gaps between what I saw and where Telecom could, and should, be.

The Technologies

The broadband landing page is great – although one could argue that starting with a technology rather than a use case is going to alienate a good percentage of people. The little speedos by the titles help though, and it’s great to see the UFB prices advertised as the same as VDSL.

The Plans

The UFB (why would you want anything else) plans are on the low side, but the data caps are consistent with the other two technologies offered, so I guess that’s one less thing to think about. I would really like to see an additional much higher cap so that families can rule forget about the constraint of caps. I’d also like to see the ability to have or at least see a guaranteed CIR – committed information rate of the line – both domestically and offshore. There is, for example, no point having a 100 mbps UFB line to the exchange if your data then goes through congested local or international backhaul that gives you under 1mpbs in reality. So why not guarantee a minimum speed, and why not charge for increased professional grade packages?

The way the plans are displayed is admirably simple – but it was only on the second visit that I picked out the 100mbps UFB option. The xDSL naked option is similarly hidden.


Once you pick a plan, and I like that this happens before the address checker, it’s time to find your address. I feel that Telecom misses a trick here by not welcoming their mobile customers (like me), who already have a relationship but perhaps not a fixed-line. I’ve spend tens of thousands of dollars with Telecom, so surely a kick-back would be in order?

And for folks like me who have a fixed-line internet with another provider, but no phone line (or unknown phone line) there is no explicit option beyond “I am new here.”

To UFB or not UFB

And then it all ground to a halt with a fundamental error. While UFB has been available in my street for some months, Telecom is simply not offering it to customers.

There are over 30 residences at this address, but perhaps Telecom has decided that multi-family and high occupancy dwellings are just too hard. That’s perhaps a reflection of Chorus playing hardball with buildings (it’s all about a required bit of equipment called an MDU) and it’s also about ISPs having no power to drive Chorus to deliver to the end user. I’d like to see Chorus pay for this, and certainly they should get zero credit for “passing residences” when there is seemingly no willingness or ability to actually connect.

But back to Telecom. I this case they are simply wrong, as one other ISP, at least, is getting UFB installed into this building. Thanks indeed to the ever-awesome Vibe Communications, who usually target large corporate and small ISP customers.

So I strongly recommend that you shop around if you see the message above, and at very least check the UFB rollout map (which shows my residence as being in the UFB zone).

Caps Pricing

The pricing is as seen earlier, but the choices for what happens when you go over a data cap are not good at all. You can choose to either lose your internet (64kbps will not run anything), or you can pay an extortionate rate per GB. While, for example, the first 500GB on the maximum plan costs $129, the second 500GB would cost $500, and let’s not forget that the UFB line rental overhead was paid for out of the first 50o GB.

Fixing the way data caps are charged

Nobody can predict with certainly how much internet they will use, and everybody (especially in aggregate) is using more and more GB of data over time. So charging like this has three strongly negative  impacts.

  • Customers who over-estimate how much data they will use will pay more than they should – and be very unhappy with Telecom
  • Customers who underestimate how much data they use, will pay more than they would have if they were on the right plan, and so will be very unhappy with Telecom
  • All customers will experience a chilling effect on data use – with a bias towards using less internet than is natural, and this bias is holding back society and the economy. That makes us all very unhappy with Telecom.

There is a solution, and to me a fair answer here is simple.

Telecom, and other ISPs, can automatically charge customers at the appropriate rate for their data use. Use 40GB or less one month? Pay $85 that month. Use 458GB the next month? Then pay $129 for that month, and so on. For households that use over 500GB, why not charge at a pro-rated rate per GB at the $129/500GB rate. Even better, charge $149 (say), the 1TB rate. And for those who want to cap their bill, allow them to pick a maximum before throttling, and provide them plenty of warnings.

Fixed line Phone

I like that the internet offering is not pushing calling as a priority, and it feels like a big shift from the past where the process was to get a phone line and add internet. Good.

But the calling options could be better – they seem to be very specific deals that depend on who you call and when – why not offer a simpler “all you can eat” plan?

Contract or no contract

The contract page is problematic. There is a very strong push to sign customers up to as 12 month contract (this is for VDSL – there was no UFB option for me). Contract for 12 months and you save $300, and get $100-$130 of value. Don’t contract and you retain flexibility but pay $300 for the privilege. I almost never contract – as I don’t want my ISP telling me where I can live or preventing me from switching.

Why not recognise that customers who pay up front are quite valuable – and why not give them time-related loyalty bonuses? For example “If you are still with us after 12 months – you get a month free”. But more importantly, the 12 month contract customers are paying for that $300 up front cost in their monthly payments – so why is there no monthly discount for those who are taking on the installation costs?

I really did like the installation option to pick a date and time. Well done to Telecom (and the wider industry that makes this happen). I wonder how it works in practise.

Details details details – far too many

The next page asks far too many personal details for your account set-up. It starts with the personal and gets worse. I see no reason whatsoever that my ISP should know my relationship status, date of birth, number of credit cars or next of kin. I have no confidence that this data won’t be exposed to many people, and I have no confidence that it all be kept securely.

There is a better way.

Powershop, which also delivers a variable amount of service over a fixed line to the premise, asks for your name, date of birth, email, contact phone number and address for service. They also want property details, a password and payment details. I’d really like to see them remove date of birth, but there is plenty that Telecom are axing that is clearly not required for a utility.


Back to Telecom. I do like that you can get around some of the hideously personal fields with privacy friendly options, though you do need to hunt, and you may in effect have to lie on the form (e.g. employment), which is likely against the terms and conditions.


And that’s it. There was a summary page and a submit button. That last page (no screenshot sorry – as it was just the fake details I had entered) didn’t give me much confidence that Telecom where going to deliver the service – just that they would think about it.


Telecom’s process and offers are much improved, and very well done for that. But we are not there yet. The plans can be made fairer (and a march stolen on competitors), the UFB access to multi-resdence dwellings needs to be solved, and more faster and larger options can be provided. A solid B, with a commendation for improvement.

Over at BigPipe, Telecom’s secret simple broadband brand, they seem to be doing a lot right. The sign-up is far less invasive, and the plans are unlimited and it’s month to month. But there is no UFB, a requirement to buy your own modem (why not sell one) and it’s a low-rent brand that many people would not feel comfortable with. But why not replace the Telecom offers with ones like these?

Posted in NZ Business | 3 Comments

Telecom’s burden is marketing: Spark

What does Telecom do?

For me it’s simple – as a telco (leaving aside Gen-i) it provides reliable internet and voice connectivity. That connectivity is accessed over the air and via copper and fibre, and there is a strong switch towards demand for pure data access, rather than voice, txt or other services.

When Telecom wins it delivers simplicity, and three recent changes were great to see. The first was the removal of cripplingly expensive data roaming costs so that we don’t have to do the SIM dance when travelling across the pond and to other frequent destinations. The second was the rollout of the iOS (and Android I suspect) application for mobile customers, an application that allows easy addition of data packs for relatively reasonable costs. It’s not perfect – I’ve heard about delays and the incessant texts are annoying – but it’s worlds away from the past. The third is a new system for in-store staff, which makes their work, and ability to deliver great customer service, lot simpler than before, though I suspect there is plenty more to do.

So the proposed name change to Spark is disturbing, and for three reasons.

The first is that the old name is strong, while the new one is appalling. We are incredibly dependant upon our telecommunication providers and demand similar levels of dependability and reliability from them as we do banks. “Telecom” is a name rich in history, not all of it bad, and can be relied upon as a NZ institution to deliver a good service. “Spark” is a small thing that is liable to disappear very quickly.

The second is that this rebranding is a distraction. Telecom’s transformation, like Air New Zealand’s before it, is a long, slow gradual process. It means a return to simplicity of offerings, delivering outstanding customer interactions, and relentless focus on delivering  fast unrestricted data pipes over a variety of mediums. This is happening, but changing the name has nothing to do with these activities, and will cause staff and customers to wonder what the heck is going on. I’d much prefer that the focus remains on the changes, and allow our increasingly positive interactions with Telecom improve their brand equity.

Thirdly this feels like an expensive capture by marketing folks, internally and externally. Telecom has long had an issue with the strange belief that they are a marketing company rather than a product or services company. This has meant wildly expensive spending on television and other advertisements, constant rebranding of the company and products (XT as an example) and a vast and complex series of products that makes doing business incredibly difficult. At issue is not just the cost, but the energy of staff and senior management that goes into “marketing” rather than into delivering great products and services.


The change happens on April 1, so there is a chance it’s all a joke. Please.

For me the rebranding is a critically poor decision, a distraction and a reason to question what is happening at the board and senior executive level.

Perhaps it’s happening because the marketing department has little ability to create impact at the product level, and they need something to do. A lot of the delivery of Telecom’s products is outsourced (e.g. to Alcatel Lucent), but external marketing websites, TV and billboard advertisements and rebrandings are relatively easy for the marketing team to do. This means vast budgets and numbers of people internally and externally are focused on marketing overhead rather than the core issues like products, pricing and customer interactions.

If I were a board member this would be simple – I’d be strongly advocating that this is evidence of marketing over-reach, and that the budget be stripped and the existing team reduced almost to zero. What a sad waste.

Posted in NZ Business | 15 Comments

Let’s fix the New Zealand Food System

In 2001, while I was living in the USA, I read the book Fast Food Nation, shortly after it was released.

I stopped eating meat.

The USA’s food system was so broken that the quality of the meat being consumed was not just poor, but dangerous to consumers. Abattoir lines were so fast that workers, who were generally very poorly paid, overworked and temporary, were operating in conditions that made it essentially impossible to maintain hygiene standards. Chickens were raised in barns where disease ran rampant, over-use of antibiotics increased human resistance to these drugs by bacteria, while perverse economic incentives driven by anti-Cuba sentiment prioritised fat-producing high fructose corn syrup (HFCS) over sugar.

Overall the bacteria levels in meat were often critically high, essentially every piece of chicken had salmonella, and there was no semblance of control by the regulators. Indeed the producers had fought and won a long battle against the FDA for self-inspection and increasingly lower FDA funding, so that there were too few inspectors and their powers were crippled.

It was the end game from the classic USA prioritisation of quantity and short term profits at the expense of quality. Products from giant food companies were reformulated time and time again, and became less and less like real food and more and more like chemicals.

Meanwhile the US has led a global explosion of a switch to ‘irresistible’ foods that are very high in salt, sugar (or HFCS) and fat, foods that our bodies are triggered to just keep eating, and yet which create all sorts of health and well-being issues.

Since then we’ve seen the rise of markets like Whole Foods, which will not sell chemicals-as-food, and end to end control of branded meat. The situation is a lot better, but only if you can afford it, and in the USA most cannot.

New Zealand

So a contributing factor for my choice to return to New Zealand in 2003 was that our strong food system meant that the quality of our food was second to none. It was a joy to be able to eat meat, knowing that from the farm to my plate it was protected by an unimpeachable food system.

But time moves on, and somehow something has changed. This Metro expose has the details, which I won’t repeat here, but it appears to be excellent journalism.

It is arguable that our food inspection system, which traditionally separated the inspectors from the producers, has become corrupted. Not in the money-under the table sense, but in the sense that some inspectors are no longer independent. This letter to the Minister by Stephen Judd from late 2010 correctly identifies the hazards of allowing self-regulation in an industry like this. Despite the best intentions, the short term profit incentives will always be to increase production at the expense of safe food, and the system will be steadily undermined.

The Metro expose comes after the publicity from the well known Fonterra food system issues, and forces us all to consider whether or not our food system in New Zealand is even in control. Urgent action is required.

Beyond Control

But just being in control of our food system is not good enough for New Zealand. Our economy and society is completely dependant on our food exports, and to maintain our reputation and to increase our export margins our food system needs to be inarguably the best in the world. We should be demanding – and tracking – the highest quality of standards from the farm to the plate. That means everything from treatment of animals (including diet), environmental sustainability on farms, animal transport and processing, food handling and so on and on.

I would like to see a future where consumers, whether local or international, have visibility of the entire food system, from farm to their plate. We should be delivering the evidence that shows why the world should completely trust our food system over all others, showing that our food is the highest quality.

New Zealand’s food safety may be perceived by some as an environmental, safety or social issue, but if this is unaddressed it will become the most critical economic issue of our time. As New Zealanders interested in our economic security we should collectively have zero tolerance for accepting anything that would bring our food system into disrepute.

This is not a game where self-regulation is acceptable, but that’s just one symptom to address. The underlying cause is that we need to lift our standards, starting at the political level, to ensure that we remain the best in the world at what we do.

Posted in NZ Business | 3 Comments