VCs and Contacts

December 7, 2005 – 7:00 pm

Today I went to Auckland to meet Russell Brown of Public Address, to my
uncle’s work, then finally to meet with some VCs. Russell first.
He’s an interesting guy, very articulate (as befits a good on-air
personality!) and full of background for all the things that are
puzzling me about New Zealand: why is the DSL so shit? Why does nobody
just grab Telecom by the regulatory balls and squeeze? etc.

He’s a Mac user, his son plays Warcraft 3 and World of Warcraft,
and he’s fighting hard to open up sound archives for free use and
reuse. He’d fit in with Cory Doctorow, Paula LeDieu, and Ben
Hammersley in England. So I introduced them via e-mail. This should
be fun!

My uncle, Jeff, runs a Windows software development company. He
had just got back from Microsoft, where they were chuffed to learn
he’d written his point-of-sale app in their latest and greatest suite
of dev tools. So chuffed (I think he was the first) they’ll help
promote and sell his product. Jeff pointed me toward a source of
cheap computer hardware: “New Zealand Computer Sales”. Apparently
they bring in formerly-leased hardware by the container-load to sell,
and you can get a P3 with an XP license for $199 or $299. I have a
project I’m playing with that won’t need fuck-off hardware. Cool!

He also put me on to the fact that the Lottery Commission gathers a
ton of money through gambling revenue and has to disperse it. They
fund sports, culture, and lots more. I’m going to look into whether
they’d fund some of the improvements the local school needs (heater
for the outdoor pool, computer hardware, etc.). Sites: Who
Can Apply
, and CommunityNet

The VCs were interesting. Roger Dennis, a recently-returned Kiwi,
put me on to them. He’s working with them to build an investment fund
of around $100MM. They’re traditional VCs, looking to invest in a
range of companies (10-20) and put from $1MM to $15MM into them.
They’re focused on exiting for $100MM or more, probably via IPOing on
the NYSE. I’ve been working with O’Reilly’s Alpha Tech Ventures for so
long I’d forgotten what large-scale investing was. It was cool to see
them doing it in New Zealand.

We talked for about an hour, and it was good to get confirmation
for my initial judgements. Yes, NZ is too small to become huge
in–every company they look at must be able to service the
international market. Yes, NZ is handicapped by retarded broadband
and the flensing pricing models for bandwidth. Yes, our main strength
as a nation is that our generalist approach lets us solve in
unconventional ways the problems that others have already given up on.
We can be lean, mean, fast, and strong. What they’re finding, though,
is that we rarely have the international management experience to lead
the types of companies they want to build.

It’s interesting, I see a range of companies being built in NZ.
Some are lifestyle companies, which NZ’s size makes it perfectly
suited for: two or three employees, making enough money so all can
live comfortably and the owner gets a nice retirement. Some are
build-and-flip products, with no business model but attractive
employees, assets, or other difficult-to-value things. And some are
real businesses, with ambitions to grow overseas.

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