Ask anyone about IT start-ups in the Dunedin and they will mention The Distiller, the group of fledgling businesses that work alongside each other in a room at the top of the Innovation Centre on the edge of the Otago University campus.
The Distiller, a non profit organisation for 'techopreneurs', was founded by Jason Leong and his business partners James Wigglesworth and Francois Bondiguel, together with Pierre-Emmanuel De La Bussiere and Tim Calder .
The best way to find out about the kinds of business ideas that are brewed at The Distiller is to have a chat with Leong who, with his business partners, has created PocketSmith, an online personal finance tool.
When Computerworld called in, Leong was busy working on version two of PocketSmith, which has already achieved distinction by winning the TUANZ Commerce Award in 2009. He says it currently has 15,000 users in around 140 countries. It is a ‘freemium’ business model whereby users download the software for free, but if they want to fully utilise the tool they must pay from $8 a month.
To date five percent of users are paying, but they have also white-labelled the product, with the biggest deal being with Workplace Options, a global employee assistance provider which has 32 million customers worldwide.
Leong says when PocketSmith first launched there was plenty of competition in the consumer financial market, but many competitors appear to have fallen away.
“They were funded between $1 million and $40 million and they just bled through it. They didn’t explore a revenue stream from the beginning and then they ran out of money,” he says. “We’re prudent, which is one of the reasons we’re still around.”
Leong says the purpose of The Distiller is to nurture IT companies like Pocketsmith at the very beginning of their formation. “The main reason we started The Distiller is because we were lonely,” he says.
The idea was modelled on Y Combinator in the US, where small amounts of money (around $18,000) are given to start-up companies who are expected to move to Silicon Valley and live for three months in a hothouse learning environment.
Leong says they liked the model, and while they couldn’t provide the funding, they could enable the environment. The university allows them a rent-free space in return for occasional guest lectures on entrepreneurship.
The Distiller concept has evolved as the founders' lives have changed. Leong's two business partners Wigglesworth and Bondiguel recently moved to Auckland where they have set up a kind of Distiller branch office in partnership with Otago University.
Leong has lived in Dunedin for 16 years and he too intends to leave the city at some stage. But when he does, he likes the idea of having helped created an IT community in the city.
This is the fourth in a series of articles about the Dunedin IT scene. Tomorrow Computerworld talks to social media specialist Andrew Long.