The garden’s blooming, despite the rocky soil

Everywhere I look now I see promising tech start-ups

Okay, so I’ve been sitting in the editor’s chair for a few weeks now and I’ve come to a few conclusions.

As some of you will be aware, I spent five years-plus in Australia, ending in December 2005. I distinctly remember the buzz, or rather the lack of buzz, in the IT industry in New Zealand at the time. Corporate IT was way out of favour with the rest of the business after the great “nothing happened” of Y2K.

Local IT development was happening, but it was a struggle. There were few venture capitalists, even fewer angels, and IT start-ups were seriously challenged.

I remember conferences on this sorry state of affairs. The Celtic Tiger was roaring and New Zealand feared it was catching the “Argentinian disease” of terminal decline. New Zealand’s population was falling and it was all but impossible to attract programmers or engineers.

I swear I saw a tumbleweed blowing down Queen Street.

Oh, how things have changed. Everywhere I look now I see promising tech start-ups. In fact, some of them must have been launched before I left and are now starting to live up to their promise. They have come out of the universities, like Endace, or have been formed by returning expats, like Cyberglue (see page eight).

They’ve come out of incubators, a business initiative that was really only kicking off back in 2000. And they’ve come out of nowhere, funded by the “three Fs” (friends, family and fools).

I hear good things about government programmes that enable these small companies to study potential markets and find potential partners — and to get the assistance they need without having to negotiate too much red tape.

I also hear that the cost of broadband is now one of the biggest barriers these little companies face.

I asked high-tech guru Tony Seba (see page eight) what he thought the barriers to success were for start-ups here in New Zealand, and, mild mannered as he is, he immediately jumped on the cost of broadband, tapping insistently on the table to make sure I’d heard.

I don’t want to turn this editorial into yet another moan about broadband, but with broadband costing ten times what it costs in the US, New Zealand finds it very hard to compete, Seba said.

So, how do we compete? I guess we take less pay to make up for the extra costs.

I also hear that qualified kids coming out of university still have trouble finding jobs and, despite the skills shortage, we still insist on previous work experience and don’t give them a fair go.

They end up moving elsewhere to get a start and we end up hoping they’ll come back some day.

But overall, things have changed very much for the better. There is real entrepreneurship now and real innovation in technology. And, best of all, it’s happening organically. In contrast to the Celtic Tiger we were once so jealous of, we are not pouring money into incentive schemes (or bribes if you prefer) to attract the international IT giants who will leave just as quickly as they arrive.

I can’t help feeling enormously positive about the way New Zealand has changed during those five years.

The seeds were planted back then, in amongst all that angst and self-absorption, and the garden is now starting to bloom.

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