Put money in marketing says IT retiree

Aucklander John O'Hara won't say if he's a millionaire, though he does own a large house at Hobsonville and two planes at Whenuapai.

Aucklander John O’Hara won't say if he's a millionaire, though he does own a large house at Hobsonville and two planes at Whenuapai.

He "retired" last year aged just 44 and concentrates now on helping Kiwi firms take their software into overseas markets.

O’Hara, who is a member of the New Zealand High Tech Council and inaugural director of venture capitalists IT Capital, helped create ISP Voyager Internet and sold kiwifruit around the world with Reserve Bank governor Don Brash. He also brought PC Disk Down Under subscription software to New Zealand, along with millions of L’il Orbits mini-donuts.

More recently O’Hara, as chief executive, sold PV2 electricity billing software for Wel Technology (now owned by Spectrum Resources and called Kinetiq) across North America and says the principles of selling software or donuts are just the same.

The former chairman of Infolink is presently helping about five Kiwi innovators, including Applied Logic a 19-year-old software producer on whose board he now sits.

O’Hara says Applied Logic serves many New Zealand firms and has just sold billing and accounting systems to Telecom Cook Islands and Telecom Samoa. Applied Logic is now looking to expand into the US but O’Hara says it is "premature" to say how it might be done as “these things are sensitive”.

Similarly, he is coy about other interests, only revealing that they are software producers whose product serves a vertical market here in New Zealand - one that can easily be adapted for an overseas vertical market.

O'Hara says he prefers licensing arrangements and joint venture arrangements. "You get more seats on the ground a lot quicker this way. There’s lower risks, lower cost and better profitability. These deals require identified potential partners. I negotiate the deals,” he says.

“My experience with the traditional model [of overseas expansion] has been to find a distributor. You set them up to make sales, but it doesn’t happen and it creates heartache,” says O’Hara.

O’Hara says the US, Canada and Britain offer Kiwi firms the most opportunity. “Their legal systems are similar, cultural issues similar and their vertical markets are identical so the products need very little customisation,” he says.

O’Hara says selling overseas is easier than in the limited New Zealand market and if firms “want a kitten, ask for a pony.” They could find a product worth $NZ100,000 here, may fetch $200,000 in the US and £200,000 in the UK.

He says what happens traditionally with such firms is that they tend to "blow off" all their money on research and development, leaving little or nothing for marketing. Marketing dollars are essential as marketing is needed to generate sales and hence the revenue that creates the profit, he says.

Because some firms are cash-short, O’Hara is often "paid" with a seat on the board and a share of the business.

O'Hara recently told members of the New Zealand Software Exporters Association - of which he was previously export director - to look for a well-established company with a product past its use-by date, a new market entrant coming from a related industry or a vendor that can use their product as an extension of an existing line.New Zealand firms must show their value proposition - how their product can reduce costs, reduce time to market, add functionality, and help vendors meet their competition.

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